Wednesday, November 30 2022

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Amy Buckley, tax associate at Azets, reviews the requirements and timelines for registering trusts.

As the trust registration deadline for many non-taxable trusts is fast approaching, we wanted to take this opportunity to reiterate the registration requirements and deadlines for all trusts below:

Registration conditions

The main categories of trusts affected by the new requirements include:

  1. British Express Trusts – An express trust is a trust deliberately created by a settlor, for example in the form of a deed or a declaration of trust. Certain types of trusts, such as statutory trusts established under legislation, are not express trusts. It should be noted that certain express trusts are specifically excluded from the requirement to register.
  2. Non-UK express trustswho:
    Acquire land or property in the UK on or after 6 October 2020 (these trusts will be on the register but will not be subject to the third party data sharing provisions unless otherwise specified); Where
    Have at least one UK-resident fiduciary and enter into a new business relationship with a UK “relevant person” (basically a UK professional services provider) as of October 6, 2020. This means that non-UK trusts without a UK-resident trustee will not be required to register if their only connection to the UK is through a business relationship with a UK-based adviser.

More details on the registration requirements can be found on our blog at New HMRC Trust Registration Service (TRS) | United Kingdom

Registration deadlines

The interaction between the new and old rules and registration deadlines is complex and further guidance is needed, but the deadlines are believed to work broadly as follows:

  • For a taxable trust which was created and becomes taxable before 6 April 2021, it must register no later than 31 January following the tax year in which a relevant UK tax liability arises (although income tax and capital gains tax purposes, there is an October 5 deadline for registration after the end of the tax year and trustees must meet this deadline, if applicable).
  • For trusts created on or after April 6, 2021, they must register no later than September 1, 2022 and 90 days after the trust first became registrable.
  • For non-taxable trusts that fall under the new rules, they must register no later than September 1, 2022 and 90 days after the trust first becomes registrable.
  • Already registered taxable trusts have until September 1, 2022 to provide the additional information required under the extended TRS.

For any changes to the information, it is understood that the period within which the TRS must be updated depends on whether it was provided under the old or the new regulations.

  • Information provided under the old rules for taxable trusts already registered, no later than January 31 following the tax year of the change in a year in which the trust has a relevant tax liability.
  • Information provided under the new rules for all types of trusts (including additional information required for taxable trusts), within 90 days of the date of the change.

For practical reasons, it may be easier to update any required changes within 90 days of the change, rather than having to distinguish between information provided under the old rules and the new rules. We are awaiting further guidance from HMRC to see if these two deadlines will be met in practice.

Taxable trusts with outstanding tax liabilities are required to report on their tax return that the trust is current on an annual basis as of January 31.

Failure to meet deadlines is subject to penalties. Our team of specialist tax advisers can provide further details of the proposed sanctions regime if required. Talk to a member of our Tax team today.

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