Do you or a family member have a Trust? It may now need to be registered with HMRC

All Trusts (save for a few exceptions) now need to be registered with HMRC. There is already a necessity to register some Trusts however, the UK is now implementing the EU’s Fifth Money Laundering Directive (5MLD) and this requires some significant changes which we all must be aware of. This must be done by the 10th of March 2022 for existing Trusts or otherwise, within 30 days of creation of new Trusts.

For example, please note the following: –

1. All UK trusts will have to register whether or not they have tax liabilities.

2. Those trusts which are already registered will have to provide some additional information about their beneficial owners.

3. Third parties will be able to access information on the Register.

4. Trustees will only have thirty days from the creation of a trust or from the date of any changes to the beneficial owners of the trust to report the relevant information.

There are additional changes which are relevant to non UK Trusts however, this article does not intend to cover international points of law.

In order to identify which Trusts must be registered, it is easiest to understand which Trusts do not need to be registered. The following categories of Trusts are those that do not need to be registered with HMRC under the new rules:-

1. Legislative Trusts. For example Trusts arising where a person dies without a Will or trusts created under a court order such as as a result of a divorce;

2. trusts relating to joint ownership of property where the Trustees and the beneficiaries are the same;

3. charitable trusts;

4. pension scheme or Trusts or Trusts of insurance policies;

5. Trusts for vulnerable beneficiaries or employee Trusts;

6. certain commercial trusts – for example relating to bond issues or syndicated loans.

7. Trusts having effect on death, for example a Trust that is included in a persons Will. This is only excluded for two years and so, if such a Trust is still in existence once the person in question have been dead for two years, it will then need to be registered

If the Trust that is being registered does have tax liabilities, then, under the new rules, more information will need to be provided. If the Trust which is being registered does not have tax liabilities, they only have to provide information on the beneficial owners of the Trust and not, for example, on the Trust assets.

Not only does information have to be provided in respect of the Trust being created, but also, where any of the registered information changes. This change mush be registered with HMRC within 30 days of it happening.

Sounds complicated right? We at Pepperells can provide you with advice and help you with this process should you require it. Please do not hesitate to contact us now.