As part of the UK government’s implementation of the 5th EU Money Laundering Directive almost all Trusts are required to be registered with HMRC using the Online Trust Registration Service (TRS).
Online Trust Registration Service Key features:
- With a few exceptions, all trusts are required to be registered with the TRS.
- This applies both to new and existing trusts including long standing trusts that may have completed tax returns for many years.
- There are non-compliance penalties
- Registration requires information to be provided about when the trust was created, what assets it has along with the names of the person creating the trust, the trustees and the beneficiaries.
The principal exceptions are Trusts with less than £50, insurance trusts where the insurance has not yet paid up, Bare Trusts, Vulnerable persons’ trusts and statutory trusts arising on the death of an intestate person.
For some time now it has been apparent that despite the legal requirement to register, the TRS online portal has not been able to cope with registering any case where no tax return was required. HMRC have now announced that the deadline of March 2022 for registrations of non-active trusts of this sort is has been extended and at present it seems that the earliest extended deadline will be March 2023 but HMRC have said that they will give 12 months’ notice of the new deadline. To date the government seems to have been quite keen to implement the 5th EU Money Laundering Directive despite our exit from the EU but the writer does wonder if this postponement might be a signal of a new approach.
At Herrington Carmichael we will continue to monitor the position, when and if it becomes necessary to register those trusts which do not have to submit tax returns, we will do our best to notify anyone who we be believe may be affected.
Help to register a Trust
At present we are offering to register trusts which do have to complete tax returns but have yet to register for a fee of £250 plus VAT. The deadline for registering most active trusts has now passed and if you have not registered it is important that you do so immediately.
HMRC gaining more control
While talking about obligations for submission of information and other items to HMRC, Rishi Sunak’s budget has sneaked through a few more nasties on behalf of HMRC. With effect from next year the penalties for late payment of tax are to be substantially increased, and in addition more powers are being given to HMRC to demand certain information from our Banks, fortunately most of these powers are not very likely to affect the average taxpayer. It does however concern us (and incidentally the House of Lords and a number of other commentators) that the government seems to be giving more and more draconian and sometimes largely unfettered powers to HMRC, this is an area which all of us need to watch. At the risk of straying into politics I do at times wonder if some members of the government have become addicted to a certain level of authoritarianism?
For further advice, please do contact a member of the Private Wealth Team using the contact form below.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to your own particular matter before action is taken.
