Are you, or have you been, a trustee of a trust created by you or someone else? Are you named on the deeds or title documentation of a property which is not yours? Is your property registered in the name of someone else?
If you have answered YES to any of the above, then you need to be aware of recently introduced legislation which significantly increases the burden on trustees by requiring them to register with HMRC. Failure to comply could lead to trustees becoming personally liable for hefty penalties.
Under the new legislation, most trusts (including those which have been in existence for many years) must be registered with HMRC’s Trust Registration Service (TRS). Previously, registration was only required where the trust incurred a tax liability in a particular year, but this is no longer the case. Now only trusts that fall within a small number of exceptions are exempt from registration. Even trusts that existed on or after 6 October 2020 but which have since ceased to exist must be registered.
Registration must be completed by 1 September 2022.
HMRC has indicated that it will be imposing financial penalties on trustees who fail to register trusts before the deadline although the level of the penalties is not yet known. Our advice to clients is to avoid penalties being incurred by ensuring that all relevant trusts are registered prior to the deadline.
“Many trustees are likely to be caught out by the changes in the rules on trust registration and face unexpected penalties. We are in the process of contacting as many current and former clients as possible to warn them of the risk of failing to register. However, we would encourage anyone who is concerned that they may need to register a trust to contact us for advice”.
It is not always easy to know whether your trust is one which needs to be registered. At Sills & Betteridge we have a team of approachable, professional, regulated lawyers across our offices who can help you identify if registration is required and assist you with the registration process in advance of the reporting deadline. If you would like to speak to us about this, then please call us on 0800 542 4245 or email firstname.lastname@example.org