Trust Registration Service – the new deadlines

The scope of the Trust Registration Service (TRS) has been significantly expanded as part of the UK's implementation of the Fifth Anti-Money Laundering Directive (5MLD). Previously, only trusts with a tax liability needed to register.

Now, almost all UK express trusts, and some non-UK trusts, must register by 1 September 2022. This includes many common trusts used in estate planning, such as those holding life insurance policies or family investment companies. Failure to register can lead to penalties, so trustees should act now to ensure they are compliant.

What is an express trust?

An express trust is a trust created deliberately by a settlor, usually in the form of a written document such as a trust deed or a will. It does not include trusts that arise by operation of law (such as statutory or resulting trusts). Common examples of express trusts that now need to register include discretionary trusts, interest in possession trusts, and bare trusts holding investments for minors.

Information required for registration

Trustees must provide detailed information about the trust, including its name, date of creation, and a description of its assets. More importantly, they must provide the details of all 'beneficial owners'. This includes the settlor, the trustees, any named beneficiaries, and anyone else who exercises control over the trust. This information will be held on a central register by HMRC.

Exemptions from registration

While the new rules are broad, there are some exemptions. For example, trusts used to hold funds for a registered pension scheme, charitable trusts, and certain trusts created by a will (if they are wound up within two years of death) are generally exempt. However, the exemptions are specific and complex. Trustees should seek professional advice to determine whether their trust needs to be registered.