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Trust Registration Service – Final decison

Posted 23rd April 2020

We mentioned last year that the government were proposing changes to the Trust Registration Service (TRS). The consultation closed on 21 February and the decision has been published.

The current position is that affected trusts are only required to register once they incur a tax liability. This is to be widened to include affected trusts irrespective of whether the trust has incurred a tax liability. The government plans to bring into scope trusts where:

  • Their purpose and structure mean payments to beneficiaries are predetermined and highly controlled
  • They are already supervised by HMRC or other regulatory bodies

Trusts to be included:

  • Express trusts that are not mentioned as out of scope below
  • Should a trust out of scope become a taxpaying trust, the requirement to register on the TRS will continue in order for the trust tax return to be issued

Trusts proposed to be excluded:

  • Bare trusts
  • Some express trusts are established in a specific form to meet the conditions of legislation but are not imposed by that legislation. For example: personal injury trusts, vulnerable beneficiary trusts, approved share options and profit sharing schemes, maintenance fund trusts for historic buildings
  • Trusts holding life insurance polices, income protection policies or retirement death benefits
  • Charitable trusts
  • Registered pension schemes held in trust are already subject to regulation by either the Financial Conduct Authority or the Pensions Regulator

The regulations will come into force this year and its expected the TRS will be ready to register these trusts in 2021. The proposals are therefore:

  • Trusts in existence on 10 March 2020 must register by 10 March 2022
  • Trusts set up after 10 March 2020 must register within 30 days or by 10 March 2022 whichever is later
  • Trusts set up on or after 10 March 2022 will have 30 days to register
  • Once registered on the updated system trustees will have 30 days from when they are aware of any changes to update ehe details
  • Until 10 March 2022 all trusts that incur a tax liability for the first time should register on TRS under the current process

Please call us if you have any questions or we can assist you.


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