The UK government has enacted Regulations to comply with the European Union’s Fourth Anti Money Laundering Directive. As part of the process for complying with these new regulations, a new online system has been established for registering trusts with HMRC, called the “Trust Registration Service”. The Trusts Register is intended to provide a single point of access to register and update trust records online.
All trusts with UK income tax or capital gains tax liabilities must now be registered with HMRC via the Trust Registration Service, and penalties will be incurred if trustees fail to register their trusts by the deadlines imposed by HMRC.
For new trusts, the deadline for registration is 5 October of the tax year after the trust is set up, or when it starts to make income or chargeable gains, if this is later.
For this year only, HMRC has extended the deadline to 5 December 2017 because HMRC experienced so many problems in getting the service to go live. HMRC have confirmed that they will not impose any penalties on trustees or executors who apply for registration of their trusts or estate between 5 October 2017 and 5 December 2017, but that extension will operate in 2017 and not in any subsequent years.
The details you will need to provide when applying for registration of a trust include the names, dates of birth, National Insurance numbers and UTRs for each of the trustees, the settlor (if alive), each adult beneficiary and any other person with influence or involvement with the trust (eg a protector), as well as full details of all assets in the trust, valued at the date of entry into the trust. You may also be asked for details of the deceased person if the trust is being established by a will or under the rules of intestacy.
In addition to trusts, an obligation has now also been imposed on Executors/Administrators of what HMRC call “complex” estates to use the Trust Registration Service to register those estates with HMRC. In those cases, the details you will need to provide including the name, date of birth, National Insurance number and UTR for each personal representative, as well as for the deceased person.
You will need to apply for registration twice if the deceased person has a complex estate and he or she left a will that creates a trust and the trust is likely to have a tax liability.
For law firms who act as agents for clients’ tax affairs, the first stage is to set up an Agent Services Account which is quite simple and almost instantaneous for a sole practitioner but may be more problematic for a larger firm.
Armed with the new sign-in details, it is possible to access the service and register a trust, although absolutely none of the information already held by HMRC has been used to populate the form, so if you have already registered a trust using Form 41G, none of the information will have migrated to the new system.
As a conservative estimate, it will take in excess of 3 hours plus waiting time to collect information from trustees and beneficiaries to complete each registration. As practitioners have nothing else to do between now and 31 January 2018, it should just about be do-able!
Senior Solicitor at Barrett & Co Solicitors LLP