New rules introduced by the EU fifth money laundering directive mean that it is now a legal requirement to register any UK trust deliberately created (express trust), even if there is no tax liability; for example, bare trusts. Have you complied with HMRC’s requirement to register trusts?
Under the EU’s fourth money laundering directive, the UK has committed to ensuring that there is a robust anti-money laundering and counter terrorist-financing regime. As part of that commitment the UK Government has pledged improved transparency about ownership of assets held in trusts.
Since 2017 any trust with a tax liability has been required to register on the HMRC Trust Register. Registrable taxable trusts created before 6 April 2021 must register by 5 October in the tax year after becoming liable to income tax or capital gains tax for the first time (31 January in the following tax year for other taxes).
All UK Trusts must be registered including Bare Trusts
New rules introduced by the EU fifth money laundering directive mean that it is now a legal requirement to register any UK trust deliberately created (express trust), even if there is no tax liability; for example, bare trusts.
New Information for existing Trusts must be uploaded
Also, existing trusts already on the register will need to add extra data, being country of residence, nationality, and the nature and extent of a beneficiary’s interest.
Non-UK express trusts must register if they acquire an interest in UK land or if they have at least one UK trustee and they enter into a business relationship with a UK adviser who is subject to money laundering regulations.
Are you a Trustee or Settlor of a Trust?
You may be unaware that you are a trustee or settlor of a trust and, therefore, it would be wise to liaise with your financial advisor and or solicitor to check whether you have previously made an investment that has been put into a trust wrapper. The trustee may be legally obligated to register these investment trusts.
Exclusions to the Trust Register
There is a list of types of trusts excluded from registering, ranging from: life insurance policies without a surrender value; trusts arising on intestacy; pension scheme trusts; charitable trusts; co-ownership trusts of jointly held property where the trustees and beneficiaries are the same persons (for example, joint bank accounts or land and property held as tenants in common).
Trusts can be registered through HMRC’s website and you must use your government gateway account. Information is required on the trustees, settlors, and beneficiaries such as dates of birth and national insurance numbers.
An Agent can register a trust on behalf of the trustees, but if you wish your Agent to handle any future updates to the register, you must complete HMRC’s ‘digital handshake’ to authorise them.
HMRC will hold the details of the registration but access will be restricted to various law enforcement agencies.
Deadline for Reporting Your Trust
Date The Trust established | 1st Relevant Tax Liability Arises | Deadline for Registration |
| Before 6 April 2021 | At any time | 5 October following the end of the tax year in which the first relevant tax liability arises if it is income tax or CGT 31 January following the end of the tax year in which the first relevant tax liability arises in other cases |
| After 5 April 2021 | Before 4 June 2022 | 1 September 2022 |
| After 5 April 2021 | After 3 June 2022 | Within 90 days of the first relevant tax liability arising |
Non-Taxable Express Trusts Deadline for Reporting
The deadline for reporting a registrable non-taxable express trust, which was in existence on 6 October 2020, is 1 September 2022. Non-taxable trusts created after 6 October 2020 must register by 90 days of being created or 1 September 2022, if later. Thereafter, trusts should be registered within 90 days of creation and trustees should update the data on the register within 90 days of becoming aware of any changes.
In addition, the Trust Register must also be updated within 90 days of any changes to the trust details or beneficial ownership. Where the trust is taxable, the trustees must also declare on their annual Self-Assessment tax return that the Trust Register is up to date
We have actioned trust registrations for trusts that clients have made us aware of trusts, and that we are still engaged with, but please get in touch if you need our assistance with trust registration prior to the deadline of 1st September 2022.
Would you like some expert advice?
If you would like advice on trusts or any other aspect of tax planning please do contact us.
The HB team is here to help with all your tax, cash flow and accounting questions and can help you make your money work harder for you and your business. If you would like to talk about how we can help you and your business, please feel free to contact the team on 01992 444466. We’re accountants for business and we’re here to help you survive and grow.
The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above
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