The Trust Register is a database maintained by HM Revenue and Customs (“HMRC“) to record details of certain trusts including its beneficial owners. The Trust Register is generally not publicly accessible. Recent changes in legislation mean that the majority of trusts are now registrable. Trustees must ensure that their trust is compliant to avoid HMRC penalties.
1. What types of trusts need to register?
Most UK trusts need to be registered whether they incur tax or not, unless specifically excluded (see below). A “trust” for this purpose can include one with minimal assets or one that is imposed by law when land/ property is purchased jointly (subject to the co-ownership exclusion – see below). Non-UK trusts with a UK connection are also registrable in some circumstances.
2. What are the exclusions?
The exclusions are limited and generally only apply to non-taxable trusts; they include: registered pension scheme trusts, trusts of certain life insurance policies, most charitable trusts, trusts for bereaved minor children, trusts of co-owned property/ assets where both the legal title and equity are held by the same persons, trusts created before 6 October 2020 holding less than £100, and Will trusts terminated within two years of death.
3. What if the trust changes from non-taxable to taxable?
If a registered non-taxable trust starts to incur UK tax, the trustees must apply to HMRC for a Unique Tax Reference “UTR“. The UTR would replace the “Unique Reference Number” which would have been issued on registration.
4. Are there any ongoing compliance obligations relating to the Trust Register?
Whether a trust needs to be on the Trust Register or not, trustees must keep internal records listing certain data on the trust’s beneficial owners. This can be required by HMRC or law enforcement agencies at any time. If a trust is on the Trust Register, trustees have a duty to keep the registered information up to date and notify any updates to HMRC within 90 days; they must also confirm as part of their annual tax return that the Trust Register information remains up to date.
5. What are the deadlines involved?
The deadline for most trusts that are within scope of the Trust Register rules and are not already registered is 1 September 2022. Trusts set up (or which first become registrable) on or after 4 June 2022 need to be registered within 90 days.
If you are a trustee or involved with a trust that may need registering and you would like advice, please contact us.