HM Revenue & Customs’ Trust Registration Service (“TRS”)
Registration of a trust on TRS is a legal requirement for most “express” trusts, for example trusts which are created via trust deeds or under the terms of the will of someone who has died. There are however, certain exemptions and these are explained below.
The term ’express trusts’ is not as simple a definition as you might expect. For example the wording of some wills which do not include a substantive trust can still be interpreted as creating an “express trust”.
Trustees therefore need to proceed with caution to ensure that they are complying with their legal obligations. A wilful failure to register a trust can result in the trustee receiving a £5,000 fine.
How to register a trust with the Trust Registration Service (TRS)
Registering a trust on TRS involves firstly gathering all of the relevant information about the trust itself, including details about the settlor, protectors (if any), trustees, and beneficiaries.
As soon as you have all the necessary information, you can access the TRS through the Government Gateway.
If you already have a personal Government Gateway ID, you will need to create a new login in your capacity as trustee of the specific trust you intend to register. If you are a trustee of more than one trust you must have a separate login for each trust.
When you have successfully logged in you will be asked a series of questions, and will have to agree to a legal declaration before submitting the registration.
Once the trust is registered, you will receive a confirmation email from HMRC and should later receive a postal confirmation of the registration. It is essential to keep those details safe and to ensure that the details are updated when necessary. It is recommended that trustees place a copy of the trust registration letter from HMRC with the stored trust documents.
Some types of trust, for example Immediate Post Death Interest trusts often create two different registerable trusts and therefore trustees should always consider consulting a legal professional or tax advisor to ensure compliance with all regulations. We offer a fixed fee to register a trust on TRS on behalf of trustees. The legal expenses of a trust is payable from the trust’s assets. Therefore, as a trustee you can instruct us to register the trust on your behalf, often without being personally responsible for our fee.
Many trustees choose to employ a professional to register their trust so that they can be sure that the trust is registered correctly. This provides comfort that the trustee won’t be in receipt of a penalty from HMRC in years to come.
Which trusts are exempt from registration?
Certain types of trusts are excluded from mandatory registration due to their nature or purpose. The exemptions change from time to time.
It’s important to note that the specific exclusions can vary and it is always advisable to consult a legal expert for guidance.
What happens after a trust is registered?
When a trust has been registered that is not the end of the process. The trust will need to be “claimed” and the registration kept up to date.
What happens if you don’t register a trust?
If you fail to register a trust with the TRS when required it can lead to penalties being levied.
Most financial and legal organisations are obliged to request a copy of the TRS registration for a trust and to check it for accuracy before being able to advise on or manage a trust’s assets for example selling a property held in trust or investing the trust’s funds. Therefore, you may find that you are delayed in administering the trust if you have not correctly registered it. If that delay results in financial loss to the trust you can be personally responsible for that loss.
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