The TRS is a register of the beneficial ownership of trusts. Responsibility for registering a trust on the TRS lies with its trustees, and due to new regulations, the obligation to register is extending to cover trusts not previously captured.
Many more trusts may now be caught by the requirement to register, and if so, must be registered by the 1 September 2022 deadline in order to avoid penalties (up to £5,000 if HMRC considers that the failure to register is deliberate). Registration involves supplying the information of all persons involved in the trust (including the settlor, the trustees, the protectors and the beneficiaries) and once a trust is registered there is an ongoing obligation to keep the TRS register up to date.
Unlike some other beneficial ownership registers, the information on the TRS is generally not available to the public.
Previously, only express trusts (being trusts that are deliberately created - such as by a trust deed or under a Will) which were liable to UK taxes were subject to the requirement to register on the TRS. The new regulations now require a wider range of trusts to register, including:
- trusts where all trustees are UK resident;
- trusts created by a UK resident with a mixture of UK resident and non-UK resident trustees;
- trusts with no UK resident trustees which acquires UK land; and
- trusts created by a non-UK resident, with a mixture of UK resident and non-UK resident Trustees, which either acquires UK land or enters into a business relationship with a relevant person in the UK (including financial institutions, legal professionals and tax advisors).
Notably, even if a trust no longer exists, if the trust fell within one of the above categories on or after 6 October 2020, it is required to register on the TRS.
The regulations do provide a list of excluded trusts which are not required to register on the TRS. Such exclusions, however, are relatively narrow and will not exclude a large number of arrangements, including where the parties may not even be aware that a trust exists.
From 1 September 2022, organisations such as investment providers and professional advisors will require evidence that the trust has been registered with the TRS. Such organisations will not be able to provide services to trusts which are required to register on the TRS but have not done so, which could cause significant difficulties in the administration of a trust. Further, these organisations will be obliged to report any discrepancies they discover in the register to HMRC.
For advice on whether a trust is now required to register on the TRS, or for assistance on registering a trust, please contact our Private Client Team.