If you're a trustee, or you administer or benefit from a trust, it's important that you understand how the introduction of the UK Trusts Register may affect you and your trust.
What is the trust register?
The Trust Register is now the only way that trusts can be notified to His Majesty’s Revenue & Customs (HMRC) for self-assessment tax purposes. It is imperative that trustees of all new and existing trusts (whether UK based or offshore) assess whether they fall within the registration requirements and take action accordingly.
The Register was introduced in June 2017 and at that time trusts were only required to be registered where there was a UK tax liability. In October 2020 new legislation was introduced to capture all trusts, regardless of whether they have a UK tax liability.
Non-UK trusts will also be required to register if they have UK tax liabilities. In addition to this, non-UK trusts are required to register if at least one of the trustees is a UK resident and where the trustees enter into a business relationship with a UK service provider (for example lawyers, accountants and investment managers), or acquire an interest in land in the UK.
We've answered some frequently asked questions to help trustees navigate this new regulation - but please note that details are subject to change.
Our team of trusts experts is ready to help trusts and trustees with the registration process. If you would like to register a trust with HMRC, please contact us to find out more about what we can do for you.
Why did the UK introduce a Trust Register?
As an EU member state, the UK was required to implement the EU’s Fourth Anti-Money Laundering Directive (4MLD) into its own domestic law. This was accomplished with the publication of the Money-Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations on 22 June 2017.
- 4MLD - This is an EU directive aimed at strengthening the European Union's defences against terrorist financing and money laundering.
- The Fifth Money Laundering Directive (5MLD) - This is an expansion of the 4MLD and introduced changes to the electronic identification and verification, enhanced due diligence, politically exposed persons, and beneficial ownership information. It also introduced new guidance on areas like cryptocurrencies and prepaid cards.
The Regulations introduced a legal requirement for trustees of certain trusts to register information about the trusts and related individuals with HMRC.
Although these regulations were motivated by an EU directive, they will remain a part of UK law post-Brexit unless any further action is taken by the UK government.
Back to top
Who can access the register?
The register is not accessible to the public. It can only be accessed by:
- UK law enforcement authorities - this is the territorial police forces responsible for each geographical area within England, Wales, Scotland, and Northern Ireland. It also includes specialist forces such as Civil Nuclear Constabulary and British Transport Police.
- EEA financial intelligence units - the national bodies that are responsible for receiving and analysing financial intelligence related to terrorist financing and money laundering.
- Agencies responsible for enforcing the Fourth Anti-Money Laundering Directive in EEA states - this includes HMRC, National Crime Agency, and the Financial Conduct Authority.
Back to top
Trust Registration process and requirements
What's the registration deadline?
If a trust has a UK tax liability and has not previously been registered with HMRC, it must be electronically registered within:
- 90 days of creation
- Two years of death if a will trust.
A trust which does not have a UK tax liability must be registered before September 2022.
After September 2022 if you want to register a trust with HMRC, the trust must be registered within the same deadlines as the trust with a UK Tax liability (within 90 days of creation or within two years of death if a will trust).
Back to top
Who's responsible for registering a trust?
Responsibility for registration falls with the trustees:
- Trustees are the legal owners of the trust assets and are the ones responsible for the management and administration of the trust
- All trustees are responsible for the registration of the trust. Only one person needs to complete the process.
- A lead trustee must be appointed to be the designated contact for HMRC. The lead trustee will receive the trust's unique taxpayer reference (if it's a taxable trust) or a unique reference number (if it's a non-taxable trusts).
- Trustees can also appoint an agent, such as a tax advisor, to register the trust.
If you’re a trustee and would like any further information about registration, please contact our team for more information about how we can help.
Back to top
What information must be registered for a trust?
The information required covers the trust itself, its beneficial owners and any potential beneficiaries:
Trust details
- The full name of the trust
- The date on which the trust was set up
- A statement of accounts for the trust, describing the trust assets and identifying the value of each category of the trust assets at the date of settlement
- The trust’s tax residence
- Where the trust is administered
- The trustees’ contact address
- The full name of any advisers acting on behalf of the trustees for their tax affairs.
Beneficial owners & potential beneficiaries
- Full name
- Date of birth
- The nature of the individual’s role in relation to the trust
- National Insurance Number or unique taxpayer reference (if any).
For individuals without a National Insurance Number or unique taxpayer reference, you must provide their usual residential address.
If this address is not in the UK, you must also include the number, country of issue and expiry date of their passport or identification card. If the individual does not have either a passport or identification card, you must include the same details for any equivalent form of identification.
Back to top
Who are a trust’s beneficial owners?
The beneficial owners of a trust include a wide group of people, including:
- The settlor
- Trustees
- Named/ascertained beneficiaries
- If there are no names/ascertained beneficiaries, then the class of people in whose main interest the trust is set up or operates
Protectors, enforcers, guardians, appointers and anyone else who has a power to:
- Dispose of, advance, lend, invest, pay or apply trust property
- Vary or terminate the trust
- Add or remove a person as a beneficiary or to or from a class of beneficiaries
- Appoint or remove trustees or give another individual control over the trust
- Direct, withhold consent to or veto the exercise of the four powers mentioned immediately above.
Back to top
How do I register a trust?
Trustees or their agents can register a trust using the UK ‘Government Gateway’ facility after setting up a Government Gateway account online. This is yet another layer of compliance for trustees to consider alongside their many other responsibilities.
Our specialist team support trustees with a full range of compliance and administration issues and can register your trust for you too. We’ll help you understand your duties as a trustee and make sure you meet all necessary deadlines and obligations.
As well as a fully bespoke service, we also offer trust registration, tax return and trust accounts preparation on a fixed-fee basis – learn more about our trust administration services.
Back to top
Post-registration and planning
How should I plan for registration?
For costs and other reasons, trustees and settlors may prefer not to have to register, or the detailed information required about related individuals. For example:
- Protectors may wish to step down to prevent being identified as the beneficial owners of assets from which they can never benefit
- Settlors may review and amend letters of wishes to remove unnecessary references to individuals who aren't current beneficiaries or describe such individuals by class instead.
You also need to check the date that the trust registered. There are two key dates:
- If you registered a trust before 4 May 2021 - the first time you access the service, you'll need to tell HMRC if the trust is an express trust and declare if the trust has or does pay tax.
- If you registered before 17 October 2022 - when you use the service, you'll need to tell HMRC if the trust is a Schedule 3A trust, these trusts are also referred to as 'excluded express trusts'.
Back to top
What's required after registration?
Trustees must maintain accurate and up-to-date written records of the beneficial owners of the trust and of its potential beneficiaries.
Trustees of registered trusts must notify HMRC if details they have supplied (apart from asset values) change during years when the trust is taxable.
Back to top
Visit our trusts section to find out more about how our expert trusts solicitors can help with registration and other trust administration issues.
