The Trust Register - Are you ready for 5 January?

From the 26 June 2017, new rules were introduced to implement the EU’s Fourth Money Laundering Directive that requires all‘taxable relevant trusts’ to register with HMRC online. If you have not registered already, the deadline is less than 2 months away.
Who is affected?
Anyone who is a trustee of any trust or equivalent (e.g. a foundation) whether in the UK or abroad.

What is the Trust Register and the Trust Registration Service?
Trusts already registered under the old regime are required to re-register under the new system. The criteria to register a trust is significantly broader than the previous requirements.

A ‘taxable relevant trust’ is one that is liable to pay any of the following UK taxes:
  • Income Tax
  • Capital Gains Tax
  • Inheritance Tax
  • Stamp Duty Land Tax (or the new Scottish equivalent) or
  • Stamp Duty Reserve Tax.
This means that most UK trusts, (and many non-UK trusts) will need to register now or at some point in the future.

What information do HMRC want?
The trust register requires the submission of a significant amount of information, much more than previously needed to register a trust. HMRC require the obvious basics, (trust name, type of trust, date set up, residence) and who the trustees and settlor are, but they also want to know about protectors and details of the adviser who is dealing with registration of the trust.

The register requires information to identify each relevant person and for individuals you need to provide:
  • Full name
  • Date of birth
  • National Insurance number (if unavailable – full address)
  • If address is outside the UK, the passport or ID card number with country of issue and expiry date
  • The individual’s role in relation to the trust
Where there is a class of beneficiaries, e.g. the grandchildren of the settlor, these can be reported as a group. However, all beneficiaries who have received a benefit from the trust, (whether it be as a life tenant, discretionary cash distribution, interest free loans or advance of assets in specie) will need to be reported individually, as a relevant person, with all the details listed above. The register requires details of the trust assets originally settled, including values, but not additions.

What do you need to do?
Trustees can complete the register themselves by creating an HMRC login for the trust and then completing the register. The registration process will take you through the form step by step asking for the various details of the trust and each section will need to be completed before moving on to the next. You can exit the form, for example if you need to obtain more information, and as long as you complete the form within 28 days, the information already entered will be retained.

Alternatively, we can register the trust for you. We will need to request from you the information that we do not have but that will be your only involvement.

When do you need to do it by?
Trusts previously registered with HMRC have until 31 January 2018 to register under this new regime. Trusts with income and capital gains tax liability for 2016/17, which have not previously registered, have until 5 January 2017 to register online.

If the trust is not registered but is required to register due to a liability under the other taxes, the deadline for registration is 31 January 2018. For example, an IHT liability in 2016/17 means the trust needs to be registered by 31 January 2018.

What is the future?
Once the trust is registered, following each year in which at least one of the relevant taxes is payable, the trustees must, by 31 January following the tax year end, do one of two things;

  1. Notify HMRC of all changes that have taken place since the last reporting; or
  2. Confirm there were no changes.
If you have a new trust that needs to register then it needs to do so by 5 October following the end of the relevant tax year.

If your trust does not have to register this year, it may have to in the future so you will need to keep the position constantly under review.

Action Required

Please complete this authorisation form if you wish us to act for you, alternatively, please contact our Trust Team via Gregory Wheatley or your usual Buzzacott contact for further information.
Gregory Wheatley, Partner, Private Client 
E | T | +44 (0)20 7556 1278

Mary Hase, Director, Private Client
E | T | +44 (0)20 7556 1328
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