Tax & Estate Planning

Trust Registration service delays

By April 21, 2021 No Comments

We have been alerting our clients now for over twelve months to the requirement that was introduced with updated Anti-Money Laundering regulations in January 2020 that almost all Trusts would need to register with the Trust Registration Service by March next year. Prior to this, only Trusts who need to report a tax liability were required to register.

The online service for tax reporting trusts was released in April 2020 and it was indicated that the updated Trust Registration Service would be available to all Trusts from August 2020, the timescale was then deferred until Spring 2021.

The weather over the last few days or so indicates to me that Spring is now here, yet the expansion of the Trust Registration Service is not!

A recent announcement from HMRC now confirms that the IT system is expected to be available from Summer 2021.

HMRC have recognised that a shorter timescale to comply with the registration deadline of 10 March 2022 will put increased pressure on trustees and their agents, as well as IT systems and so the deadline for registration will be extended to 12 months from the date of delivery of the updated IT.

Some teething problems were experienced when the online system was launched for tax-paying trusts which will hopefully have been rectified by the time the service is available to all trusts.

There will be a requirement when we are providing advice to trusts for us to obtain confirmation from the trustees that the trust has been registered; there will be no public access to the register and therefore the onus of proof will be on trustees to provide.

Where a Trustee is registering the trust, a Government Gateway account must be obtained, note that this is a separate account to the one through which personal taxation is reported; a lead Trustee must register for an “organisation” Government Gateway account. Accountants are able to register as agents with HMRC and may therefore be able to assist with the registration process, but Henwood Court cannot do this.

Information which will need to be provided:

  • Full name of the Trust
  • Type of Trust
  • Date the Trust was established
  • A statement of accounts – a description of the Trust Assets & Value (including property address if a property is owned by the Trust)
  • Country of residence of the Trust
  • Where the Trust is administered
  • Contact address for Trustees
  • Name of any adviser being paid for legal, financial or tax advice
  • Personal information (name, date of birth, address) for the settlor, trustees and any named beneficiaries

There are still some Trusts which do not need to register

  • Trusts for life assurance policies with no surrender value
  • Will Trusts created on death that only receive assets from the estate and are wound up within two years of date of death
  • Charitable Trusts, who do not have to pay any tax on income or assets
  • A trust created by legislation, e.g. when a person dies without making a will and the estate passes to their relatives under intestacy rules
  • A trust imposed by a court, e.g. to hold compensation for a child

We will of course continue to monitor the situation and alert clients when the online system is operational.

Helen Allen