The Trust Registration Service (“TRS”) is a centralized register of beneficial ownership for trusts that has been in operation since 26 June 2017 following the EU’s 4th Anti-Money Laundering Directive (“4AMLD”) and its adoption by the UK. TRS was introduced to provide greater transparency around the ownership of trust assets and individuals connected with trusts. 4AMLD has historically required trustees to register if an express trust incurred into UK tax liabilities such as income tax, capital gains tax, inheritance tax, Stamp Duty Land Tax (Land and Buildings Transaction Tax in Scotland) or Stamp Duty Reserve Tax, with some limited exemptions. As part of the registration, trustees provide certain information related to the trust, including their details, those of the beneficiaries and the assets held by the trust.
In 2020, following the transposition into UK law of the EU’s 5th Anti-Money Laundering Directive (“5AMLD”), new rules were implemented by HMRC to widen the definition of those trusts required to register. In brief, 5AMLD removed the link between obligation to register and tax liability, so that all UK and some non-UK trusts now fall within scope, even if they are not liable to pay tax in the UK, with effect from 6th October 2020.
As a result, all express UK trusts must register with TRS on or before 1st September 2022, regardless of whether they have a tax liability. Non-UK trusts are also captured by the changes resulting from 5AMLD, based on specific circumstances and their combination (at least one UK trustee, UK business relationship with local advisors, ownership of interest in UK land or property and/or ownership of UK assets giving rise to tax liabilities and/or receipt of UK income); the registration, in this case, must also take place on or before 1st September 2022.
Trustees will have 90 days from the creation of a new trust to carry out the now obligatory registration, whist trustees of existing and already registered trusts will need to keep their records up to date with TRS and report any changes to HMRC within 90 days of them occurring.
Finally, trusts that were registered before 5AMLD may have to provide some additional information about their beneficial owners and assets of the trust depending on specific cases.
If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact firstname.lastname@example.org or your usual ACT contact.