Trust Registration Service (TRS) – Should I be Registering my Trust?

Initially introduced in 2017, HMRC’s Trust Registration Service made it a requirement for certain trusts to provide HMRC with information regarding trustees, beneficiaries, and trust assets.

Since the TRS was first introduced, HMRC has extended the list of trusts that will need to be registered with them, and there is now a requirement for each trust’s record to be reviewed and updated once a year.

Almost 6 years on from the introduction of the TRS, I still come across a large number of trusts that have not been registered, and trustees who are completely unaware of their legal obligation to do so.

Which types of trusts need to be registered with HMRC?

Some of the most common types of trust that need to be registered on the TRS include:

1. A trust created by a Will, where the trust still exists following the second anniversary of death (including bare trusts, life interest trusts, and discretionary trusts)
2. A discretionary trust set up by anyone during their lifetime
3. A Will Trust that is less than 2 years old, but has had property added to it from outside of the estate
4. A bare trust for grandchildren
5. Some property trusts, where the legal owners on the title of the property are different from the beneficial owners. For example if X is on the title of the property as the legal owner and there is a Declaration of Trust that states the property should be held equally for X, Y and Z, the property will need to be registered.
6. Any lifetime settlement created with a nominal sum set up after 6 October 2020
7. Most trusts that have a UK tax liability are required to register on the TRS (some of the relevant taxes include Income Tax, Capital Gains Tax, Inheritance Tax and Stamp Duty Land Tax).
8. A non-UK trust that has at least one UK trustee may also need to register in certain circumstances.

If you are a trustee of a trust that would be included in any of the descriptions above, and your trust has not been registered through the TRS, it is vital that you take expert advice and register as a matter of urgency, as there may be a late registration penalty imposed by HMRC that you will be liable for.

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