I Am a Trustee: Do I Need to Register the Trust with HMRC?

The Trust Registration Service (TRS) was introduced in 2017 as part of the UK’s efforts to combat money laundering. It requires trustees to provide detailed information about the trust, including its assets, the individuals involved as trustees, and the beneficiaries. Recent changes to the rules now mean that a greater number of trusts must be registered, even if they do not have a tax liability.

Do I Need to Register the Trust?

If you are acting as a trustee, it is essential to determine whether the trust under your management must be registered. Since 6 October 2020, almost all express trusts, including many that are non-taxable, must be registered unless they are specifically excluded by the rules. All taxable trusts must be registered without exception.

What If the Trust Was Already Registered with HMRC?

Even if the trust was previously registered with HMRC using Form 41G and has been issued a Unique Taxpayer Reference (UTR), it still needs to be registered on the Trust Registration Service. The TRS requires significantly more detailed information than was previously collected.

Is There a Deadline to Register the Trust with the TRS?

Yes, there are deadlines, and these depend on both the trust’s creation date and its tax status. Below is a summary of common types of trusts and their relevant deadlines:

1. Life Interest Trust Created Under a Will

Example: A person leaves a life interest in their property to their spouse, with the property passing to the children after the spouse’s death.

• If the trust is non-taxable (for example, there is no rental income and no capital gains tax liability), and the assets are simply held for the life tenant, it must be registered by 1 September 2022 if the deceased passed away on or before 6 October 2020.
• If the deceased passed away after 6 October 2020, it must be registered within 90 days, or by 1 September 2022—whichever is later.
• If the trust later becomes taxable (for example, it begins to generate income or a property is sold), registration must take place within 90 days of it becoming taxable.

2. Right to Reside Trust Created Under a Will

Example: A will allows a child to live in the property for life, after which it passes to another beneficiary.

• These trusts are treated in the same way as life interest trusts.
• If non-taxable, they must be registered by 1 September 2022 (if created before 6 October 2020) or within 90 days following the date of death.
• If taxable (such as earning rental income or selling the property), registration must take place within 90 days of the trust becoming taxable.

3. Discretionary Will Trust

Example: A discretionary trust created in a will, where the trustees decide when and how to distribute income or capital among a class of beneficiaries.

• These are generally considered express trusts, which means they must be registered, even if they are non-taxable.
• If the deceased passed away on or before 6 October 2020 and the trust remains non-taxable, it must be registered by 1 September 2022.
• If the trust was created after 6 October 2020, it must be registered within 90 days of the date it comes into effect. This is typically either the date of death or when the estate administration ends and assets are transferred into trust.
• If the trust becomes taxable (for example, by receiving investment income or incurring capital gains), registration must occur within 90 days of becoming liable to tax.

4. Lifetime Discretionary Trust

Example: A person places property into a discretionary trust during their lifetime for the benefit of children and grandchildren, with no immediate tax implications.

• If created on or before 6 October 2020 and it is non-taxable, it should have been registered by 1 September 2022.
• If created after 6 October 2020, it must be registered within 90 days of its creation, or when it becomes registrable (for example, when assets are added).
• If or when the trust becomes taxable (for example, from investment income or a chargeable lifetime transfer), registration must be completed within 90 days of the liability arising.

5. Lifetime Life Interest Trust

Example: A person transfers a rental property into trust, granting their spouse the right to the rental income for life, with the property passing to children upon the spouse’s death.

• If the trust was created before 6 October 2020 and is not taxable, it must be registered by 1 September 2022.
• If created after 6 October 2020 and remains non-taxable, it must be registered within 90 days of creation or of becoming registrable.
• If the trust becomes taxable (for example, from rental income or the sale of the property incurring capital gains tax), it must be registered within 90 days of becoming taxable.

What Happens If I Miss the Deadline?

Failing to register a trust within the required timeframe can result in penalties being issued by HMRC. It is therefore essential to understand the obligations and act in good time.