Which trusts need to register with the TRS?
When the TRS was first introduced in 2017, only “taxable relevant trusts” (broadly, UK and non-UK resident trusts with a relevant UK tax liability – Income Tax, CGT, IHT or Stamp Duty Land Tax) had to register on the TRS and provide certain information in relation to their settlors, beneficiaries, power holders and assets.
However, the scope of registrable trusts was materially expanded to comply with the 5th Money Laundering Directive.
Specifically, all express trusts now need to register with TRS even if they do not incur a UK tax liability.
Express trusts are usually created by a written deed or declaration. Trust-based IHT-planning solutions that most advisers are familiar with – such as Discounted Gift Trusts, Gift trusts and Gift and Loan arrangements – are all ‘express trusts’. In most cases, the underlying investment for these solutions is an investment bond where tax liabilities are usually deferred until death or final surrender.
Previously, such trusts would not have needed to be registered unless and until either an IHT charge was due (such as a periodic / exit charge) or a chargeable event occurred and the trustees (not the settlor) became liable to income tax. However, the new rules mean that such trusts must now be registered even where they are not incurring any tax liabilities.
- Register non-taxable trusts in existence on or after 6 October 2020 by the 1 September 2022 or within 90 days, whichever is the later.
- Register non-taxable trusts created after 1 September 2022 within 90 days.
- Update the register with changes to the trust details and/or circumstances, within 90 days of the change.