What is the Trust Registration Service?

Forming part of the UK's implementation of the Fourth and Fifth EU Money Laundering Directive, the Trust Registration Service (TRS) is managed by HMRC, with input required from trustees. It is a complete register of the key details of most UK trusts, and some non-UK trusts with a UK connection.

Which trusts need to register?

Generally speaking, most trusts need to register with the TRS, unless they fit within one of a small number of exemptions. The TRS will capture any trust holding property within the UK, or any non-UK trust which acquires UK property after March 2020 or has at least one UK resident trustee and enters into a 'business relationship' in the UK.

Importantly, the TRS captures bare trusts, (i.e. typically a nominee type arrangement where someone holds the trust funds on behalf of someone else). This includes individuals who hold property on behalf of another, whether that is another individual, a trust, partnership or company.

The exemptions include, but are not limited to, pilot trusts established before 6 October 2020, charitable trusts regulated in the UK, personal injury trusts and trusts for vulnerable beneficiaries.

What does this mean for any trust that I am a trustee of?

Unless your existing trust fits within the exemptions, you must (in your capacity as a trustee) ensure that the trust is registered before 1 September 2022. Any new trusts must be registered within 90 days of creation.

If your trust pays tax (including income tax, capital gains tax, inheritance tax or LBTT/ADS), you must also ensure that the TRS is kept updated and an annual declaration is completed.

Non-compliance with the TRS may result in fixed penalties, ranging from £100 to a maximum of either £300 or 5% of the total tax liability.

How do I register my trust?

The TRS is an online system and can only be accessed through the HMRC website. To register a trust, the 'Lead Trustee' will need to set up a Government Gateway User ID for the trust before completing the registration. This Government Gateway ID must be kept safe for future use.

You may choose to instruct an agent to register your trust on the TRS. Brodies LLP would be delighted to assist with this and can provide a fixed fee estimate per registration, depending on the complexity and the number of trusts to be registered.

What other trust compliance obligations should I be aware of?

In addition to the TRS, you (in your capacity as a trustee) must ensure that you have considered the following compliance obligations:

  •  Automatic Exchange of Information (AEOI)

- These regulations enable the automatic exchange of tax information between member countries to ensure funds held in trust are correctly identified and taxed.

- AEOI reporting is required for any individual connected to the trust (settlor, trustee, beneficiary or person holding effective control over the trust) with a potential or actual non-UK connection.

- A non-UK connection can include (but is not limited to) an individual's place of birth or residency, a foreign bank account or being tax resident in a non-UK country.

  • Register of Controlling Interests in Land (RCI)

-This register seeks to provide clarity as to who owns land in Scotland. Owners (known as "the recorded person" must provide full information as to any person who exercises control over land (known as an "associate")

- Where a trust owns land, the trustees must keep the RCI up to date whenever trustees change via resignations, deaths or new appointments/assumptions.

  • Register of Overseas Entities (ROE)

-This register seeks to provide additional information about overseas entities owning UK property, as well as their beneficial owners.

It is important to note that each of these are distinct registers. Compliance with one does not exempt you from a duty to comply with another. Some changes to the trust may trigger a requirement to update multiple registers.

If you would like to instruct Brodies LLP to take care of the registration on your behalf, or if you would like to discuss your trust further, please contact Claire Scott or your usual Brodies contact.