With limited exceptions, all existing UK trusts will be required to register with the Trust Registration Service (TRS) by 1 September 2022, irrespective of whether they have a UK tax liability.

What is the TRS?

The TRS was established in 2017 with the objective to enable trusts to comply with changes in the anti-money laundering regulations. It was also designed to improve the transparency around the beneficial ownership of assets held within trust structures.

Which Trusts need to be Registered?

Initially, only trusts with UK tax liabilities were required to register under the TRS. However, the Government is now pushing for the requirement to make the beneficial ownership of certain asset-owning structures more transparent. Nearly all trusts (whether or not they have a UK tax liability) are now within the framework of structures that the ‘greater transparency rules’ have been extended to include.

Which Trusts are Exempt?

Certain trusts are excluded from the registration requirements unless they are liable to pay UK tax. These include but are not limited to:-

• Some employee share schemes
• Charitable trusts
• Pension scheme trusts
• Trusts whose beneficiary is a disabled person
• Trusts which are created by a will that only holds assets from the estate
• Cash balances on accounts held in trust for minor children.

It is important to bare in mind that the registration requirements are narrowly defined and the exclusion from registration can be technically difficult to establish.

Penalties for Late Registration

Penalties are levied where registration is late. Such penalties range from £100 for being 3 months late, to £200 where registration is 6 months late, rising to 5% of the total tax liability or £300 (whichever is greater) for being over 6 months late.

How We Can Help

If you are aware of any trust structure or arrangements that may be within the TRS registration requirements or would like advice on whether a structure falls within the registration requirements, please contact our Personal Tax team for further information. We would be able to review the structure, advise on whether it falls with the registration requirements and register the trust if needed.

Please review all of your financial and tax structures and contact us prior to the September 2022 filing deadline to ensure that any structure falling within the registration requirements can be reviewed and registered (where applicable) to avoid any late registration penalties.