Trust arrangements – significant changes to reporting requirements are being introduced
Trust arrangements will see significant changes to how their reporting requirements are reported, with changes being introduced this year. The changes are a result of the 5th Anti-Money Laundering Directive (5AMLD) which extends the requirement to register certain ‘arrangements’ using HMRC Trust Registration Service (TRS).
You should be aware that the new requirements are very broad and include many arrangements which had no registration requirements previously. Broadly the old regime only required trusts which were taxable to register with HMRC. The new arrangements go much further to include non-taxable trusts and many more types of arrangements.
For example, the following arrangements may need to be registered with HMRC.
- Nominee / bare trusts arrangements: This is where the legal owner of an asset is different from the beneficial owner.
- Deeds of assignment: Often used in relation to property to transfer all or part ownership of a property to another person. These are sometimes used to transfer property between spouses or family members.
- Will trusts: Trusts created by someone’s will. For example, a will may provide that income received from an asset(s) will be paid to the surviving spouse for their lifetime, with the capital then passing to the deceased’s children.
- Inheritance tax/financial planning arrangements: These may be packaged products, set up by a financial advisor or applied for online. They may be structured as a trust, but as there was no income or gains arising the trust was not taxable and had no requirement to register under the TRS previously. They must now be registered.
- Non-UK arrangements: The rules can also apply to non-UK accounts and arrangements, so any offshore interests should also be reviewed carefully.
If you have one of these arrangements, accounts or products, you may be required to register using the new TRS under the new regime.
HMRC has updated the TRS so that it is capable of handling the registrations required under 5AMLD. Trustees of existing non-taxable trusts and affected arrangements will have until 1 September 2022 to submit their initial registration to HMRC using TRS.
The registration process requires a separate Government Gateway account to be created for the Trust, and the information to be reported may not all be immediately available, so we recommend that you review any arrangements as soon as possible to ensure that you can meet the deadline.
Once the initial registration has been submitted, the trustees will also be required to report any changes to the register within 90 days of the change. HMRC can impose penalties on trustees who fail to meet the reporting deadlines.
How can Alexander & Co assist with your Trust arrangements?
Alexander & Co can help you by:
- Reviewing any arrangements and advising you as to whether you need to register under TRS.
- Preparation and submission of the initial registration to HMRC.
- Being appointed as agent to update and maintain the trust register on your behalf.
Should you require assistance from Alexander & Co with existing Trust arrangements, or if you are considering a Trust arrangement, please contact us using the form below or email email@example.com.
Visit our dedicated trust services page for more.