Trust Registration Deadline Has Been Extended

Trustees who missed the September deadline to comply with the expanded scope of the Trust Registration regime have been given a lifeline by HMRC, which announced that penalties will not be imposed on those who missed the cut-off date.

Introduced as part of the UK’s implementation of the Fifth Money Laundering Directive, the new rules aim to counter terrorism and money laundering with improved transparency on the ownership of assets held in trusts.

The scope of the trust register extends to all UK express trusts and some non-UK trusts, regardless of whether they pay tax. Some trusts are excluded if they have a limited purpose and are unlikely to be used for money laundering or financing terrorism.

Taxable trusts must provide detailed information about beneficial owners, including the settlor, trustees, beneficiaries, and others who exercise control over the trust. This includes names, birth details, residence, nationality, and beneficial interests. Changes must be notified within 90 days.

While HMRC has eased the penalties, trustees must ensure compliance to avoid fines of up to £5,000 per trust. It is essential to seek specialist advice if uncertain about compliance.

For further assistance, please call 01724 281616 or email info@sbblaw.com.

The UK Trust Registration Service (TRS) was extended in 2021 to cover most express trusts, not just those with a tax liability. The rules came in to comply with EU money laundering directives and have remained in force despite Brexit. Trustees of in-scope trusts must register the trust with HMRC and keep the register updated as the trust's information changes.

Most express trusts created in writing must be registered, including discretionary trusts, life interest trusts, bare trusts (in some circumstances), and trusts holding land. Some exemptions exist, notably for charitable trusts, will trusts in the first two years after death, and certain pension and life policy trusts.

If you are a trustee and you do not know whether the trust needs to be registered, take advice. The penalties for non-registration can be significant.

The TRS requires the trust's name and date of creation, the assets held in the trust, and full identification details for the settlor, the trustees, the beneficiaries and any other person who exercises control over the trust. For trusts holding land, the property details also need to be registered.

The information has to be kept up to date. Changes of trustee, changes of beneficiary, addition of assets and any other material change should be notified within 90 days.

The TRS is not fully public. Trust information is shared with HMRC and law enforcement agencies. Beneficial ownership information for trusts holding UK land can be requested by third parties who can demonstrate a legitimate interest, but the threshold for disclosure is high in practice.

If you are a trustee of a trust that has not yet been registered, take action now. Registration is not difficult but it does require accurate information about all the parties to the trust, which can take time to gather. Our wills and probate team handles trust registration alongside ongoing trust administration and we can register a trust on your behalf for a fixed fee in most cases.