Reasons to choose Wilson Browne
If you are a Trustee of, benefit from, or administer a Trust, it is important that you understand how the introduction of changes to the UK Trust Register may affect you.
The Trust Registration Service was first introduced in 2017 as part of the UK’s implementation of the 4th Money Laundering Directive. Under the current regime, Trustees of certain types of trust have to register information with HMRC via an online portal – including information about the settlors, trustees, protector(s) (if any), beneficiaries and any other natural person exercising effective control of the trust.
The register is private but the information is shared with law enforcement agencies. Currently only express trusts which have a UK tax liability need to be registered with HMRC and, at present, a Trust must be registered by 31st January after the end of the tax year in which the tax liability falls. However, this will all change with the implementation of the 5th Money Laundering Directive in March 2020.
The 5th Money Laundering Directive extends the Trust Registration Service to cover all express trusts and not just those with a UK tax liability. This will include trusts that receive no income, such as pilot trusts, or trusts holding residential property occupied rent-free by a beneficiary and possible even all property owned jointly including land and bank accounts.
Trustees, therefore, who previously have had no compliance obligations with HMRC will need to undertake new responsibilities from March 2020. According to the Association of Taxation Technicians (ATT), this is likely to extend the number of registrable trusts from around 200,000 to as many as 2 million.
From March 2020, any new trust will need to be registered within 30 days of its creation and updates will need to be made to the Trust Registration Service within 30 days of any changes. Unregistered trusts which are already in existence will have a long stop date of 31 March 2021 to make their first registration. A new penalty system for late registration will be introduced and details are expected from HMRC in due course.
Trustees therefore need to be mindful of these time limits to avoid incurring any penalties if the deadlines are missed.