Trust Registration Service
Over the last few years, the Trust Registration Service (TRS) has brought about a significant change in how Trusts are registered and managed. In this article, we will look at the TRS in more detail and explore some of its key features.
What is the Trust Registration Service?
In 2017, the online TRS portal was introduced by HM Revenue and Customs (HMRC) to provide a single platform for Trusts and complex estates to register and provide necessary information and documentation. It is one of the measures introduced by the government to tackle money laundering, tax evasion and other financial crime, by making it more difficult for Trusts to be used for dishonest purposes.
The TRS requires Trusts that are liable to pay UK taxes to register with HMRC and provide details about their beneficiaries, Trustees and the Trust’s assets. One of the key benefits of the TRS is that it increases transparency around Trusts and their beneficiaries, while streamlining the registration process.
Who needs to register their Trust with the Trust Registration Service?
In 2020, further changes were introduced to the TRS requiring all UK-based Trusts that have a tax liability to register with the TRS (unless the Trust is specifically exempted). This includes Trusts that generate income from property and investments, as well as Trusts that receive income from other sources (including rental income or dividends). Usually, the deadline for registering your Trust with the TRS is 31 January after the end of the tax year in which the Trust was created.
What information do Trustees need to provide when registering their Trust?
When registering a Trust with the TRS, in addition to basic details regarding the Trust being necessary, Trustees will also need to provide a range of information including details of any loans or debts owed by the Trust, and the Trust’s Unique Taxpayer Reference number (UTR), if it has one.
What happens if you do not register a Trust with the TRS?
It is a legal requirement for Trustees to register the Trust, but some Trusts are exempted. If you do not register your Trust or keep the details on the register up to date, HMRC enforces penalties. These penalties may include a fine of up to £5,000 if the Trustee deliberately fails to register a Trust on time, or does not keep the online register up to date.
Maintaining the TRS can be time-consuming for Trustees. Additionally, with penalties imposed for non-compliance, we would recommend engaging with a specialist, such as the team at the Jonathan Lea Network, to assist with the registration process and manage any changes for you. If you are unsure whether a Trust needs to be registered, please contact us to discuss this further.
The Trust Registration Service is a valuable tool for Trustees who want to comply with their tax obligations and ensure that their Trust is managed in a transparent and accountable way. By providing all the necessary information and documentation in one place, the TRS can save Trustees time and reduce the risk of penalties and fines. If you are a Trustee of a UK-based Trust, please get in touch with us to discuss registering or managing your Trust with the TRS to ensure that you are meeting your legal requirements.