Changes to the registration of trusts have been delayed for six months until autumn 2021 following delays to developing the new online system
The Trust Registration Service (TRS) is being modified to enable the registration of non-tax paying trusts.
HMRC has now confirmed that the service will not be available until later this year. It has confirmed that it expects the TRS service to be open for non-taxpaying trust registrations by autumn 2021, rather than spring 2021.
In an update on gov.uk, HMRC stated that it ‘appreciated the inconvenience caused by this delay to our IT systems, given the original legislative deadline of March 2022’.
It has now confirmed that it will be extending the deadline, to provide trustees and agents approximately 12 months in which to register, from the date that the service is available.
Further updates and clarification on the final deadline will be confirmed in due course.
As part of the ongoing development phase, HMRC said it is ‘currently in the development phase of extending TRS to include functionality to register non-tax paying trusts. To help HMRC in developing this aspect of the service, we’re looking to speak to people who have set up a trust or are a trustee for a trust that is non-taxable. We would also like to hear from you if you’re an agent who will be registering a trust that is non-taxable, on behalf of a client’.
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Currently, trustees or their agents must register a trust using the Trust Registration Service (TRS) if the trust has been deliberately created by a settlor (it is an ‘express trust’) and it is currently liable to pay any of the following taxes: income tax, capital gains tax, inheritance tax, stamp duty land tax (land and buildings transaction tax in Scotland) and stamp duty reserve tax.
Some estates also have to be registered if the personal representatives need to complete a self assessment trust and estate tax return.
New rules were introduced on 6 October 2020, which extended the scope of the trust register to all UK and some non-UK trusts, whether or not the trust has to pay any tax, but with some specific exclusions. However, trustees cannot register trusts under the new rules until later in 2021 when the new TRS service is ready.
In addition, the new rules require details on the register about the people associated with the trust (‘beneficial owners’) to be provided to organisations and persons involved in preventative work in the field of anti-money laundering, counter terrorist financing and associated offences. The information will only be released on request in certain limited circumstances.
The new rules were introduced as part of the UK’s implementation of the Fifth Money Laundering Directive (5MLD) to make sure that the UK has an anti-money laundering and counter terrorist financing regime that is up to date, effective