New rules are coming into force to extend the obligation to register all UK express Trusts and some non-UK Trusts with the HMRC Trust Register Service (TRS), irrespective of whether the trust has incurred a tax liability (subject to some specific exclusions).
The scope of Trusts which must be registered has been significantly widened, therefore millions of Trusts which previously may not have been registerable, must now be registered.
Failure to register on time will result in the Trustees being liable for penalties. It is important to note, the responsibility is solely on the Trustees and they will be liable for any penalties, not an agent they may use to assist them in managing the trust.
Jennifer Robinson from the Private Client team at Wake Smith Solicitors looks at the issue.
New Rules
Previously, Trustees were only required to register a Trust with TRS if it was liable to pay UK taxes.
Under the new rules, Trustees are required to register the Trust if it falls under one of the following categories:
- UK express Trusts such as discretionary Trusts, immediate post death interest Trusts or bare Trusts irrespective of tax liabilities
- Non-UK resident Trust if it acquires real estate in the UK
- Non-UK Trusts with at least one UK Trustee entering into a business relationship with a UK obliged entity such as a UK bank or a solicitor
- Trusts that are liable for one of the following taxes (even if it may otherwise be classed as an exempt Trust)
- income tax
- capital gains tax
- inheritance tax
- Stamp Duty Land Tax (Buildings Transaction Tax in Scotland)
- Stamp Duty Reserve Tax
How can Wake Smith help?
Not many people are aware how burdensome being appointed as a Trustee can be.
The law surrounding Trusts and Tax can be complex and difficult to understand, therefore seeking professional advice to help you understand your role as a Trustee can help take a weight off your shoulders.
Wake Smith is familiar with the law and keeps up to date with any changes therefore if you are in doubt about whether your Trust has become registrable, or you require any other advice or assistance in your role as Trustee, Wake Smith Solicitors are more than happy to assist you.
For advice on registration of Trusts or any other private client matters contact Suzanne Porter, director and head of private client at Wake Smith on 0114 224 2178 or [email protected]
