What is the Trust Registration Scheme (“TRS”) created by HMRC?

This is effectively a register that collects information about trusts, which was first set up in 2017 by HM Revenue and Customs. At that time, trustees had to register trusts if the trust was liable for income tax, Capital Gains Tax, Inheritance Tax, or any form of Stamp Duty taxes.

However, 6th October 2020, the majority of trusts are now required to register on the TRS regardless of whether they have any tax liability or not.

What types of trusts must register on the TRS?

Pretty much any type of “ express” trust must be registered. This will include bare trusts, life interest trusts and discretionary trusts. Even a very innocuous trust such as a bare trust where maybe a parent is holding assets (a simple bank account is excluded) on behalf of a child until the 18 years of age must be recorded on the TRS.

When must a trust be registered on the TRS?

If a trust needs to be registered, then this must be done within 90 days of the creation of the trust. Potentially penalties can be issued if trusts are registered late.

Do details need to be kept up to date on the TRS?

Yes there is an obligation to keep the details of the trust and the trustees/beneficiaries up to date. It is perfectly possible for agents such as solicitors or accountants to deal with the registration requirements on behalf of trustees. I have dealt with many trust registrations on th TRS for leditns and am more thna happy to assist with this.

What about high value estates – do these need to be recorded on the TRS as well?

Yes, if in a estate is defined as “complex“ then it will need to be recorded on the TRS so that a tax reference number (UTR) can be generated and the income tax/Capital Gains Tax processed accordingly. An estate is defined as complex if any of the following criteria are met: –

• The estate value is more than £2.5 million as at the date of death.
• The value of assets sold by the executors or administrators in anyone tax year was more than £500,000.
• The total income and capital gains tax due for the administration period is going to be more than £10,000.