Changes to Trust registration

What is the Trust Registration Service?

The Trust Registration Service (TRS) is a register of beneficial ownership of trusts, first set up in June 2017, designed to implement the EU’s 4th Anti-Money Laundering Directive (“4MLD”).

Historically under 4MLD only trusts with a tax liability needed to be registered on HMRC’s Trust Registration Services.

This included the following:

1. UK express trusts – if the trustee had incurred a liability (in a given tax year), to pay ‘relevant UK tax.’
2. Non-UK express trusts which either:
   • Received a UK source income; or
   • Had UK assets on which the trustees had liability, (in a given tax year), to pay ‘relevant UK tax.’

As first set up in 2017, trustees were required to register on the TRS if the trust was liable to pay any of the following taxes:

• Income Tax
• Inheritance Tax
• Capital Gains Tax
• Stamp Duty Land Tax (SDLT)
• Stamp Duty Reserve Tax
• Land and Buildings Transaction Tax (Scotland)
• Land Transaction Tax (Wales).

Changes under the 5th Anti-Money Laundering Directive

The 5th Anti-Money Laundering Directive implemented new rules which came into effect on 6 October 2020. This brought some significant changes, widening the definition of trusts required to register. Some of the main changes are:

1.All the following trusts need to be registered with the TRS by 1 September and any new trusts after this date have 90 days to register with TRS:

• All trusts within 4MLD’s scope
• Non-taxable trusts
• All UK express trusts
• Non-UK express trusts with at least one UK resident trustee where the trustees have a UK business relationship or acquire an interest in UK land
• Taxable trusts
• Express UK and non-UK trusts with a liability to UK taxation.

Schedule 3A notes any trusts that are excluded.

2.The 90 day rule is also in place for any changes in information supplied.

3.Third parties will be able to access information on the register, though only if there is a ‘legitimate interest’. There are exemptions to this:

• They are under the age of 18
• They lack capacity
• HMRC considers that making the information available will expose them to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation.

4.Trusts which have already been registered will have to provide more information on the beneficial owners.

There may be penalties payable where trustees fail to register or update information with the TRS.

Further Information

If you would like to discuss the changes in registering a trust further, please contact Ashtons Legal on trustregistration@ashtonslegal.co.uk or call 0330 404 0733 and ask to speak to a member of our Trust Registration team.