From 1 September 2022, changes to the rules regarding the Trust Registration Service (TRS) mean that more trusts will need to be registered with HM Revenue & Customs.
The TRS was introduced five years ago to make the beneficial ownership of assets held in trust more transparent.
While many trusts have had to sign up for the service already, the remit of the service is expanding to include a greater number and type of trusts than ever before.
What changes are being made to the Trust Registration Service?
From September, the requirement to register with the TRS will apply not only to trusts with a tax liability but to all trusts.
This includes trusts set up many years ago, which may have been forgotten about or left dormant, but which remain extant.
This registration process has been open since 1 September 2021, but time is running out to complete it.
Will a trust need to register?
If you operate a trust the answer is likely to be yes. Under the changes, only a limited number of exemptions exist.
Some other less common types of express trusts that are set up for particular purposes are also excluded from registration unless they are liable for tax.
Be aware that this change to the rules means that for the first time some offshore trusts will also need to be registered.
How does a client register for the Trust Registration Service?
To comply with the registration requirements, trustees will need to input details of the settlor, trustees and beneficiaries into an online portal.
At a minimum, trustees will need to confirm annually that there have been no changes and notify the TRS of any changes within 90 days.
Some trusts may have already completed a 41G form containing some of this information. However, HMRC has confirmed that this did not collect sufficient evidence to meet the requirements of the new rules.
Therefore, those trusts which registered separately with HMRC before must now using this form must register and resubmit information via the TRS.
HMRC strongly recommends that trustees familiarise themselves with the TRS system and obtain the information required to register in advance of the deadline in September.
How we can help your clients…
At MGI Midgley Snelling LLP we are able to explain, in no-nonsense terms, how this might impact on your clients and assist them with the process.
Please get in touch with us to help!