Farms and Estates update: Changes to HMRC's trust registration

Published: Monday 21 February 2022

In 2017, HMRC introduced new guidance for trusts, requiring them to register under the Trust Registration Service (TRS) when a liability to UK tax had been incurred.

From September 2022, all trusts will now have to register under TRS, unless they fall within one of HMRC’s specific exemptions. A trust will be registerable under HMRC’s TRS where:

  • it is an express trust. An express trust is one which was intentionally created. Most UK trusts are express trusts; or

  • it is a UK or non-UK trust with a liability to UK taxation.

There are a number of trusts which are excluded from the filing requirement, these include:

  • Co-ownership trusts

Trusts holding jointly owned property (including bank accounts) where the trustees and the beneficiaries are the same person(s).

  • Trusts created by will

A trust created by will that holds only property from a deceased person’s estate is excluded from registration for a period of two years from date of death.

  • Historic pilot trusts

A trust in existence before 6 October 2020 that holds assets with a total value of less than £100 will be exempt from registration.

  • Life policy trusts

Insurance policies written in trust may be excluded from registration during the lifetime of the person assured.

There are certain conditions to the exclusions, critically, an exclusion will only apply where a trust is not liable to UK taxation.

Bare trusts are not specifically excluded from the requirement to register as they are typically deliberately created; therefore, unless they also meet one of HMRC’s exclusions, they will need to register under the new rules.

The deadline for registration will depend on the type of trust and when it was created:

  • Non-taxable trusts in existence on or after 6 October 2020 will need to register by 1 September 2022

  • Trusts created after 1 September 2022 will have 90 days to complete the registration

  • Taxable trusts in existence to date should already be registered under the service, or by 31 January 2022 if the trust’s first UK tax liability occurred in 2020/21.

Once registered, the trustees will be responsible for ensuring that the information held on the TRS is kept up to date annually. Any changes to trust details and circumstances held under the TRS should be updated within 90 days of the change.

From 2022, HMRC may share the information held within the TRS with third parties involved in the prevention of anti-money laundering and counter terrorist financing, though it is stated that this will be in limited circumstances.

If you are a trustee and are concerned regarding the position of your trust, please do not hesitate to get in touch with a member of our tax team, who will be happy to advise you accordingly.