Professionals working with trustees of UK and Non-UK trusts should ensure their clients are aware of new rules requiring a wider range of trusts to be registered with the HMRC Trust Register. A deadline has been set later in this year for existing non-taxable trusts to be registered, so it is not the case that it is only new or recent trusts which should be entered into the register. See below for details.
The Trust Register was introduced in June 2017 as part of the 4th Anti-Money Laundering Directive (4AMLD). It required trustees of certain trusts to register details of the beneficial owners of the trusts’ assets as part of moves to combat money laundering and terrorism financing.
Trusts captured by the 4AMLD included ‘express’ trusts with UK income tax, capital gains tax or other tax liabilities. An ‘express’ trust is one deliberately created by a settlor, usually by means of a written deed or declaration of trust.
Now, following the introduction of the 5th Anti-Money Laundering Directive, a wider range of UK trusts need to be registered. These include all UK express trusts whether or not they have UK tax liabilities, non-UK express trusts which have acquired land or property in the UK and non-UK express trusts where at least one of the trustees is a UK resident.
Registration is required unless an exemption applies and certain types of trust are still exempt from registration, such as charitable trusts or those holding pension scheme assets.
Trustees who fail to register a trust which falls within the rules, will be liable for penalties.
James Burgoyne of Brunel Professions said: “Professionals often work with clients operating UK trusts. These may involve property, investments, other financial assets or items such as art collections or cars. Professionals, many of whom may help the clients establish trusts – or indeed may be trustees themselves – should ensure that their clients are aware of their duty to register a wider range of trusts with HMRC.”
The deadline for registrations for non-taxable trusts in existence on 6 October 2020 is 1 September 2022.
Non-taxable trusts created after 6 October 2020 must register within 90 days of being created or otherwise becoming registerable, or by 1 September 2022 (whichever is later).