Trustees - Are You Ready For Increased Reporting Obligations?

In his latest blog, Wills & Probate Solicitor, Matt Kelly discusses new reporting obligations for trustees....

The online Trust Registration Service (TRS) operated by HM Revenue & Customs requires trustees to register trusts on the Trust Register through uploading details of the trust. Many trusts to date have been exempt from registration due to them being deemed non-taxable.

New Regulations For Trustees

However, the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020 came into force on 6th October 2020 and will soon require trustees of all UK resident express trusts to register details of trusts on the Trust Register, even trusts with no tax liability.

Whilst some limited exemptions apply, many common trusts will require registration including, for example, a life interest trust holding a family home or even a half share in a family home occupied by the surviving spouse. Other trusts, such as trusts holding funds in trust until a beneficiary reaches a certain age, e.g. 21, will also require registration - even where modest sums are held in a trustees’ bank account.

Registering Existing Trusts

Existing trusts that are currently not taxable must be registered on the Trust Register on or before 10th March 2022, whereas existing taxable trusts must be registered by 31st January 2022. Many trustees, especially involving trusts of the family home, will be blissfully unaware of the regulatory and reporting burden increasingly being imposed on trustees.

Many advisors are reporting technical difficulties in using the TRS system as it appears the TRS portal has not been updated to reflect the new requirements. Whilst teething problems are to be excepted, trustees and their advisors must monitor the situation to ensure the relevant trusts are registered before the deadline. It is possible that the deadlines might change so watch this space!

How Timms Can Help Trustees In Need Of Advice

If you are a trustee needing advice regarding trust registration or your duties as a trustee then please contact Matthew Kelly on 01283 561531 or m.kelly@timms-law.com.