The TRS is purely a register for the purposes of 5 AML Requirements – in a similar way to the requirements imposed when FATCA was introduced.
By 1 September 2022 all Trusts which have a tax liability for VAT, CGT, Income Tax, IHT or Inheritance Tax must be registered on the TRS unless they are specifically excluded.
Additionally, all non-taxable Trusts must register unless they meet one of the exceptions listed below:
Trusts created by a Will to hold the Deceased’s property for a period of up to 2 years. If the property is held for more than 2 years either by design or delay, then the Trust must be registered.
Trusts created for a Bereaved Minor – this is a trust created after the death of either parent or step-parent – trusts created prior to death are not included under this exclusion.
Age 18-25 Trusts – similar to the above, the Trust must meet the conditions of S71(D) – i.e. have been set up by the deceased parent, step parent and capital applied absolutely at or by age 25.
Insurance Policies:
Policy written into Trust where the pay-out occurs on death alone
Policies with a surrender value are not automatically caught unless the policy is surrendered and the realised capital remains in the trust.
Healthcare Insurance policies – are excluded provided the policy is for the assured individual
Death payments under a Retirement policy
Funds held in trust following pay-out on the death of the assured provided the funds are held for less than 2 years.
Personal Injury Trusts – the funds must be held for the person who suffered the personal injury – the funds must be disregarded as capital under Reg 46 (2) and para 12 Sch 10 Income Support (gen) Regs.
Employee Share Option Scheme Trusts
Property Ownership Trust – ownership as Joint tenants excluded as is ownership as tenants-in-common – unless there is a mismatch between the trustee(s) and the beneficiaries – usually occurs when one party to the T-I-C ownership dies or moves away.
Charitable Trusts
Pension Scheme Trusts
Trust where a Disabled Person is the Beneficiary – definition of a Disabled Person must meet HMRC criteria i.e. individual must fall into any of the categories listed below:
Disabled by reason of mental disorder
Recipient of Attendance Allowance
Receive DLA middle or higher rate
Receive PIP
Receive increased disablement payment, constant attendance allowance
Receive armed forces independence payment
Pilot Trusts – historic pilot trusts set up prior to 6/10/2020 with £100 or less and to which no funds have yet been added – must be registered once funds are added. Any PILOT trust set up post 6/10/2020 must be registered on TRS.
Trusts set up for Professional Bodies – covers ESCROW accounts, unit trusts
Maintenance Funds for Historic Buildings
Legislative Trusts – i.e. trust imposed by the Courts most commonly, bankruptcy, intestacy or matrimonial disputes.
Bank Accounts held on Bare Trust for minors – Junior ISAs are now covered – however HMRC are still considering if Premium Bonds held in trust for a minor need to be recorded.
THE ABOVE EXCLUSIONS DO NOT APPLY IF THE TRUST IS ALREADY PAYING TAX.
HMRC are issuing information regularly on any changes to the above and it is understood that they are still considering the need to register Bare Trusts – we will keep you informed of any developments. Note that Bare Trusts need to be registered unless they meet one of the 15 criteria listed above.
Please bear in mind the following:
- The procedure for obtaining a UTR for a new Trust or Estate is to enter the details on the TRS – even for those excluded under the above list
- Registration applies to all trusts be they tax paying or not unless they are covered by the above exclusions.
- The Trust Register has to be reviewed annually
- Amendments to Trust details have to be made via the TRS
- Trustees can give authority to an agent to deal with the administration of the TRS – and this must be undertaken by way of a digital handshake
- The registration is time consuming and will incur professional fees for the entries and annual review – the alternative is for the Trustees to deal with these matters personally
REGISTERING NEW AND NON TAXABLE TRUSTS
Non-taxable trusts in existence after 6 October 2020 must be registered by 1 September 2022 (even if now closed).
Non-taxable trusts created after September 2022 must be registered within 90 days of setting up
Sharon Nash ATT (Fellow)
SBN TAX AND ACCOUNTS SERVICES LTD
0161 763 8762
Email – sharon.nash@sbnta.com
SBN Tax & Accounts Services Ltd 