ARE YOU A TRUSTEE? YOU MAY NEED TO TAKE ACTION TO COMPLY WITH NEW REGULATIONS
Sara Frost
The introduction of the 5th Anti-Money Laundering Directive means that a great number of Trusts, which did not previously need to be registered with H M Revenue & Customs (HMRC), may now need to register with an on-line service called the Trust Registration Service (TRS), even if they have not incurred any tax liabilities.
There may be many Trustees who are not aware of this or may not fully appreciate that the way that they co-own assets with other people may in fact constitute a Trust which needs to be registered. For example, people who have property registered in their names, but in fact the property is also held by them for the benefit of other people whose names do not appear on the legal title deeds are in fact Trustees and would need to register with the TRS.
Other types of Trust which may need to be registered are Trusts created by a Will or during some-one’s lifetime and certain types of financial products such as Investments written in Trust and gift and loan Trusts.
For Trusts already in existence, the date they should be registered is the 1st September 2022. Trustees can deal with this themselves (www.gov.uk/guidance/register-a-trust-as-a-trustee), although the procedure is a little complicated, or they may find their accountants are able to help them deal with this. They will need to have available details of the Trust document, and the name, address, date of birth and national insurance number for the Trustees, and the names of the beneficiaries of the Trust. The lead Trustee, dealing with the registration on behalf of all Trustees, will need to have created an on-line organisation gateway account with HMRC.
HMRC have power to impose a penalty of up to £5,000 for failing to register or to keep the TRS up to date once registration is complete if they feel this is a result of deliberate behaviour on the part of the Trustees. They have stated that if they identify such a Trust, they may issue a warning letter initially, with a penalty following if the warning is ignored. However, professionals dealing with assets held in Trust are now obliged to check that the Trust has been registered with the TRS, so if this has not been done it may need to be registered before any action can be taken.
If you need advice on whether your Trust would need to be registered, please contact Sara Frost, Alan Douglas, or Rebecca Griffiths.