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UK TRUST LAWS ARE CHANGING NOTIFICATION

UK TRUST REGISTRATION SERVICE
The UK Trust Registration Service (TRS) came into force in 2017 as part of the UK implementing the EU Anti-Money Laundering Directive. The aim of this Directive is to improve transparency surrounding the beneficial ownership of assets held in trusts.

RULES
The TRS rules apply to the following Trusts in existence on or after 6 October 2020:

  1. An express trust – this is a trust created by a settlor and recorded in a document, this includes declarations of trust and wills
  2. Certain non-UK express trusts – This is if there is a link to the UK. This is where there may be a UK Trustee, or the Trust relates to UK property or assets
  3. Non express trusts generally do not require reporting unless they have a UK tax liability
  4. Bare Trusts – These are usually held in the name of the trustee

HMRC have confirmed that trustees of trusts that were in existence on or after 6 October 2020 and have since ceased will also still need to register these on the TRS database and then immediately close the trust record.

DEADLINES
The registration deadline for non-taxable trusts which fall within the TRS regime must be registered by the 1 September 2022.

Any new trusts created in the 90 days before the 1 September 2022 or from the 1 September 2022 must be registered within 90 days.

If any trusts which were already on the register on the 1 September 2022 that need update, the updated must be done within 90 days of the date the information changed.

DUTY AS A TRUSTEE
As a trustee of a Trust, it is necessary for you to consider your reporting obligation as you have a legal duty to comply.

EXCLUSIONS
Trusts excluded from the requirement to register, include:

  • Pension schemes
  • Charitable trusts
  • Will trusts that are wound up within two years of death
  • Policy trusts paying out on death or critical illness
  • Existing trusts with a value of less than £100 created prior to 6 October 2020

FAILURE
Failure to register a trust with the TRS will result in penalties.

If you have prepared a trust with Child & Child or need advice to understand your obligations, please get in touch with the Head of the Private Wealth department, Mamuna Farooq.

Email address: mamunafarooq@childandchild.co.uk

Telephone number: 02072013579

Posted By Mamuna Farooq

28 July 2022

Mamuna Farooq
Partner I Head of Middle East I Private Wealth & Tax