Written By Douglas Sims
Trusts are an incredibly useful tool and, as part of a robust financial plan, can allow you pass on your hard-earned assets to your loved ones. However, the upcoming trust registration deadline that the government have imposed, has predictively caused a sudden air of confusion surrounding trusts. In our recent webinar with our trusted connection, Kinherit, who specialise in Wills and Trusts, we were able to answer some common questions relating to this process, some of which we thought would be useful to share below.
What is the new Trust Registration Legislation and why does it matter?
The Trust registration process is a new online service to comply with the registration obligations of Trusts and Funds. This is to ensure that you are complying with anti-money laundering regulations and that the correct tax is being paid on these Trusts.
As part of the UK’s implementation of the Fifth Anti-Money Laundering Directive, the scope of the TRS was further extended in October 2020, requiring certain Trusts to be registered with HMRC by 1st September 2022.
Once registered, if there are any changes regarding the trust these then need to be confirmed, or if a Trust becomes taxable, this will need to be registered annually.
Which Trusts need to be registered?
All UK ‘express’ Trusts where the Trustees have incurred a tax liability in a given year or all non-UK ‘express’ trusts which receive a UK source of income or have UK assets, however, there are some exemptions. If you have any questions regarding your own Trusts and whether these need to be registered, please do not hesitate to get in touch with your Integrity365 adviser. Further information can also be found on the government website.
Are you the beneficiary of any money from a relative that might be in a Trust?
Are you a Trustee for a member of your family?
These are common scenarios and important to be explored ahead of this change. You have a responsibility to be aware of the forthcoming changes regarding trusts and must take any relevant action now to ensure compliance.
Who is responsible for registering a Trust?
Trustees are responsible for registering the Trust, but one person must be appointed the ‘lead Trustee’ role who will be the main point of contact regarding the registration of this with HMRC.
What happens if you do not register a Trust by the deadline?
There are expected to be fines for those who do not register the necessary Trusts, however these penalties have not yet been confirmed by the government. The process has been a constantly evolving situation with changing information being provided by HMRC and deadlines moving since 2017 – when the legislation was first introduced. As always, we would advise getting ahead of the deadline to avoid any last-minute pressure to complete the process in time.
What is the process of registering a Trust?
Firstly, as previously mentioned, a lead Trustee must be nominated to register the Trust who will then provide a variety of identifying information of those involved in the Trust – including Trustees and Beneficiaries – as well as answering a number of questions about the Trust itself and any assets this contains.
Our Trusts partners, Kinherit, have seen applications range from 60 to 98 pages long, depending on the complexity of the Trust. For example, Trusts that involve businesses, charities or property can require a lot more information in order to be registered correctly.
Is there a way to register a Trust offline?
The process must be completed online, therefore if you are not comfortable in doing this yourself through a computer, you can seek the assistance of a professional to help you. For example, Kinherit can obtain a copy of your Trust that you have provided to your Integrity365 adviser and most of the questions within the process can be answered using this and a phone call with the lead trustee.
Can someone help me in registering the Trust?
The Trust registration process can be lengthy and due to the high demand at HMRC there is limited help available from them to assist you in the process. Many people are choosing to use their accountant or a registered agent to register for them. We have a strong working relationship with Kinherit, our Will partner, who have established specialists to assist in registering Trusts.
If you have any questions regarding Trusts, please do not hesitate to get in touch with an Integrity365 adviser on 0117 450 1300 who can, if required, liaise with you and Kinherit to support you through the process of registering any trusts.
Click here to watch our recent webinar on the trust registration process click here:
Written By Douglas Sims
