HMRC Trust Register update

HMRC continue to refine and provide further clarity on how significant changes to legislation for the registration of trusts under the Fifth Money Laundering Directive apply to the HMRC Trust Register. This includes further details on the type of trust arrangements that need to be registered and the deadlines for doing so.

Unless a trust falls within one of the excluded categories (see below) and has incurred no tax liability then the trust must be registered on the HMRC Trust Register by the later of 1 September 2022 or within 90 days of creation.

Excluded trust categories:

The excluded trust category trust types which are most commonly applicable to private individuals acting as trustee are*:

• Will Trusts closed within 2 years of the date of death of the testator/testatrix
• Trusts where a disabled person is the beneficiary
• Pilot Trusts created before 6 October 2020 and that have always held less than £100
• Property ownership trusts where the beneficiaries and trustees are the same persons
• Trusts imposed by legislation or court order
• Charitable trusts
• Bank accounts or Stocks & Shares ISAs for minors
• Trusts arising from insurance policies and compensation pay-outs
• Trusts registered on the European Economic Area (EEA) register

*Correct at the time of writing and so may be subject to change by HMRC in the future.

Various details and conditions underlie these categories. For example, where a residential property is left under a Will Trust then depending on the circumstances, there may be a requirement to register two trusts. Therefore, it is still advisable for trustees to seek confirmation from their tax advisor before taking no action to register a trust.

If a trust incurs a tax liability for the first time and is in one of the categories above, then the deadline for registration is the later of 1 September 2022 or within 90 days of the date in which the trust first becomes liable for tax.

In addition to the above, where any changes are made to any of the Trust’s details recorded on the Trust Register (e.g. Trustees/beneficiaries added or removed, or their contact details) then the Register must also be updated within 90 days of these changes.

HMRC have reiterated they will begin to issue penalties in September for non-compliance of these measures.

The obligations trustees have on the HMRC Trust Register are becoming an increasing complex area and so often require guidance and assistance by a suitably qualified advisor. Therefore, please feel free to contact a member of our Trust team if you have any queries in this area.