The Trusts Registration Service (TRS) is an online system to register trusts and complex estates to obtain a Unique Taxpayer Reference which replaces the current paper system. The responsibility of registering the trusts lies with the trustees but it is likely that they will appoint their accountants or other agents who maintain the trust, to register it on their behalf.
Which trusts/estates need to be registered?
- An express trust where the trustees have incurred a UK tax liability
- Complex estates i.e. value exceeds £2.5 million, tax due exceeds £10,000 and value of assets sold exceeds £250,000 (for deaths up to April 2016) or £500,000 (for deaths after April 2016)
Which trusts DO NOT need to be registered?
- If the trustees have not incurred a UK tax liability and do not need to file a tax return
- Bare trusts
- Charitable trusts, unless and until they incur a UK tax liability
When must registration be submitted?
For trusts that have already been registered for self-assessment the deadline is 31 January after the end of that tax year. If the trust has not already been registered, the deadline is 5 October after the end of that tax year if it is an Income tax or CGT liability or 31 January if it is any other UK tax liability.
As this is the first year of the online Trust Registration System, the 5 October deadline has been extended to 5 January 2018 but the 31 January 2018 deadline remains. If the deadline is not adhered to, you will incur penalties; the values of which HMRC are yet to decide.
There is an ongoing responsibility to keep the TRS up to date with any changes, for example, to trust assets or beneficiary details.
What information is required?
HMRC have published detailed guidance as to what information is required for each person involved in the trust but, as a general rule, you will need the following for the settlor, trustees and beneficiaries:
- Date of Birth
- National Insurance Number (or passport details of National Insurance Number is not available)
If there is a class of beneficiaries, you will need to have details of all those who are currently identifiable. Additionally, you will need all details of the trust assets including amount and value of any shares that are held.
Despite trusts not always needing to be registered, trustees are still expected to maintain accurate and up to date written records of all the actual and potential beneficial owners of the trust. Any law enforcement authority can request information about the beneficial owners of the trust including from a trust which does not incur a UK tax liability.
“STOP PRESS – HMRC announce a deadline extension on Trust Registration Service
HMRC have announced that whilst the 31 January 2018 deadline still applies to trusts that have incurred a UK tax liability and are already registered for Self-Assessment (or do not require to be registered for Self-Assessment) a penalty will not be imposed on trustees or agents if the registration of these trusts is completed after 31 January 2018 but before 5 March 2018.”
This was first posted on 11 December 2017.