Have You Registered Your Trust?

New rules were introduced on 6 October 2021 as part of the UK’s implementation of the Fifth Money Laundering Directive (5MLD) extending the scope of the trust register.

Previously, trusts were only required to register if they were liable to pay tax. Under the new rules all UK trusts are required to register unless they come under specific exemptions.

Trusts that need to be registered

Trusts that need to register under 5MLD fall into three broad categories.

1. All UK express trusts unless specifically excluded

An express trust is one that is created deliberately by the settlor in express terms and usually in writing, as distinguished from one that comes in to being through the operation of the law, such as trusts set up under intestacy laws or personal injury trusts receiving funds under court order.

2. Trusts that have a UK tax liability

Irrespective of whether they are express or specifically excluded. In other words, any trust with a UK tax liability needs to register.

3. Non-UK express trusts that

– Acquire land or property in the UK; or
– Have at least one UK resident trustee and have a business relationship within the UK (such as having a UK accountant or adviser).

Common arrangements that will now need to be registered

  • Declarations of trust over land (unless the trustees are holding exclusively for themselves);
  • Investment bonds written in trust (as part of Inheritance Tax Planning for example);
  • Bare trusts; and
  • Non-complex estates under administration for more than two years.

Registration deadlines

The deadline for new registrations of existing non-taxable trusts under 5MLD is 1 September 2022.

Non-taxable trusts set up after 1 September 2022 must register within 90 days of creation.

– Trusts that need to register under the existing rules because they have a UK income tax or Capital Gains Tax liability for the first time, must do so by 5 October following the end of the tax year in which the liability arose. This is to allow time for a Unique Taxpayer Reference (UTR) to be issued under which to file the self assessment tax return.

– Trusts that already have a UTR need to register by 31 January following the tax year in which the liability to income tax or Capital Gains Tax arose (the same deadline as for the corresponding tax return).

– Trusts that have other tax liabilities that are not income tax or Capital Gains Tax that is Inheritance Tax, Stamp Duty Land Tax (and the Scottish and Welsh equivalents) and Stamp Duty Reserve Tax, must also register by 31 January in the tax year following that in which the liability arose.

Updates to Registered trusts

Currently, registered taxable trusts are required to update the trust register within 30 days of any change in details relating to the registered persons.

The Government is intending to legislate to increase this period to 90 days later this year.

How M+A Partners can help

Here at M+A Partners we have an experienced trust and estates team who will be pleased to answer any questions that you may have and support you in the registration process.

For further information on this topic, download our factsheet below.