Trust Registration Requirements

Background

Trustees of certain non-taxable trusts must now register with the HMRC’s Trust Registration Service (TRS). Previously only trusts which had become liable for certain taxes were required to register.


Which trusts are required to register?

Broadly, all express trusts (i.e. trusts created intentionally, so, for example, excluding statutory trusts set up on intestacy) are required to register with the TRS. There are however a number of exceptions, including the following;

  • Pure protection trusts - trusts holding life or retirement policies that only pay out on death, terminal or critical illness, permanent disablement or to meet the cost of healthcare services. Registration is not required, except in the rare cases where the death benefits are still in the trust after two years.
  • UK registered pension schemes - trusts used to hold money or assets of a UK registered pension scheme — such as an occupational pension scheme.
  • Pilot trusts set up before 6 October 2020 and which hold no more than £100.

A trust holding a protection policy with a surrender value is excluded up to the point the policy is surrendered. If a cash surrender value is retained in the trust, it must then be registered. If only a death claim is paid, registration would not be required, except again in the rare cases where the death benefits are still held in the trust after two years.

Further guidance is available from HMRC at Register a trust as a trustee.

You can also speak to a financial adviser. If you don’t have a financial adviser, please visit www.unbiased.co.uk to find one.


Who needs to register the trust?

It is the Trustees’ responsibility to register the trust with the TRS. However, the Trustees may authorise an agent to act and register the trust on their behalf.


What are the deadlines for registration?

There are two separate considerations:

  • Trusts already in existence on 6 October 2020 have until 1 September 2022 to register;
  • Any new express trusts created after 6 October 2020 must register within 90 days of being created or otherwise becoming registerable, or by 1 September 2022 (whichever is later).