It's important for those handling assets for others to understand trusts and how they're registered.
This guide explains what trusts are, why they need registration, who's in charge of registering them, and how to do it.
We'll also cover common questions about the registration process, like what info you need, penalties for not registering, and how legal experts can help.
Table of Contents
- What is a trust?
- When should I register a trust?
- What kind of trusts are exempt from registration?
- Who is responsible for registering a trust?
- How do I register a trust with HMRC?
- What information do I need to register a trust?
- What happens after I've registered the trust?
- How much does it cost to register a trust?
- Are there any time limits for registering a trust?
- What happens if I don't register a trust?
- Can I update a registered trust?
- What information is made public when a trust is registered?
- How can Lawhive help?
What is a trust?
A trust is a legal arrangement where one person (the settlor) transfers assets, such as money, property, or investments, to another person or entity (the trustee) to hold and manage for the benefit of others (the beneficiaries).
When should I register a trust?
If a trust becomes liable for certain taxes like Capital Gains Tax, Income Tax, Stamp Duty Land Tax, Stamp Duty Reserve Tax, Land and Buildings Transaction Tax (in Scotland), or Land Transaction Tax it must be registered.
Additionally, UK express trusts and non-UK express trusts with specific connections to the UK, such as acquiring land or property in the UK, or having at least one trustee resident in the UK and engaging in business relationships within the UK, must also register even if they have no tax liability.
What kind of trusts are exempt from registration?
Some non-taxable trusts do not have to be registered including:
Trusts that manage money or assets for a UK pension scheme
Trusts that hold life or retirement policies that pay out for specific reasons like death or illness.
Trusts that receive insurance policy benefits after the insured person dies, as long as they're distributed within 2 years.
Charitable trusts registered in the UK
Pilot trusts set up before October 6, 2020, with assets under £100.
Co-ownership trusts holding jointly owned property.
Will trusts holding assets for up to 2 years.
Trusts for bereaved children under 18 or adults aged 18 to 25, set up under a deceased parent's will.
Trusts set up under the Criminal Injuries Compensation scheme.
Financial or commercial trusts created during professional or business transactions to manage client money or assets.
Who is responsible for registering a trust?
Typically, trustees are responsible for registering a trust with HMRC. As part of their trustee duties, they must assess if the trust meets registration requirements and take action accordingly.
When a trust has more than one trustee, it must decide who will take the lead in registering the trust. The lead trustee is the main contact for the trust when HMRC needs to contact it.
Legal or tax professionals, such as trust lawyers, can also support trustees in registering a trust.
How do I register a trust with HMRC?
You can register a trust with HMRC online through the Trusts Registration Service (TRS) portal. The registration process involves providing details about the trust, its trustees, beneficiaries, and any tax liabilities it may have.
What information do I need to register a trust?
To register a trust, the lead trustee must provide:
The name of the trust
The date the trust was created
Any UK land or property purchased by the trust
Whether it's an express trust or not
Information about any business relationships in the UK (for non-UK trusts only)
Their Unique Taxpayer Reference Number
Tax information (for taxable trusts)
Any individuals associated with the trust (e.g. trustees, settlors, and beneficiaries) must supply their personal information including their name, dates of birth, contact information, and country of birth or residence.
The TRS will check whether the beneficiaries have mental capacity – the ability to understand information and make decisions about their life. Trustees do not have to disclose this information if they don’t want to, or don’t know.
What happens after I've registered the trust?
Once the trust is registered, HMRC will issue a Unique Taxpayer Reference (UTR) for the trust, which is used for tax reporting purposes. This should arrive within 15 working days.
Trustees are responsible for keeping the trust's registration details up-to-date and informing HMRC of any changes to the trust's circumstances.
How much does it cost to register a trust?
It is free to register a trust online if you do it yourself. Should you wish to instruct a solicitor or accountant to help you, you will have to pay their fees which may vary depending.
At Lawhive, our wills, trust, and probate lawyers can support you in registering a trust in the UK for affordable fixed fees, so you know exactly how much it will cost, with no hidden surprises or added extra.
Contact us for a no-obligation quote for the services of a specialist trust lawyer today.
Are there any time limits for registering a trust?
If they are taxable and created during someone’s lifetime trusts created after September 2022 must be registered within 90 days. Typically, this triggers a self-assessment record for trustees, who will be required to complete annual self-assessment returns for the trust.
What happens if I don't register a trust?
If a trust isn't registered in the required time-frame the lead trustee may face penalties for late registration ranging from £100 to £300 depending on how late registration is.
Having said that, HMRC isn't likely to impose penalties for non-registration straight away. If you don't register a trust when you should, you'll likely receive reminders to register. However, if you ignore these reminders, you could receive a penalty as above.
Can I update a registered trust?
Yes, you can update the details of a registered trust when changes are made. The lead trustee must update the register when changes are made to the trust, such as a new trustee being appointed.
Changes must be reflected on the register within 90 days.
A trustee can change their registration by logging into their Government Gateway account using their trust’s ID. If you run a taxable trust you will need to confirm the details are up to date when filling in the trust’s self-assessment tax return.
What information is made public when a trust is registered?
When a trust is registered certain information becomes public.
The following details can be accessed by the public:
The names and dates of birth of the settlor, beneficiaries, and trustees
Their residence and nationality
The interest of each party in the trust
How can Lawhive help?
At Lawhive, our network of trust solicitors can help you register a trust.
Get in touch with us today for a free case assessment and quote for the services of a specialist lawyer.