Previously, Trusts only needed to be registered with HMRC’s online Trust Registration Service (TRS) if they generated a tax consequence. But new rules, introduced to tackle money laundering as part of the EU Fifth Anti-Money Laundering Directive (5AMLD), mean that many more will need to register.
Trustees need to take note.
We work closely with WAY Investment Services and they have written a comprehensive article for us describing the rule changes:-
The new rules for Trust registration mean far more Trusts will be brought into scope. Although some Trustees will already be familiar with the system, many more will soon need to be up-to-speed on which types of Trusts need to register and by when.
There are two key deadlines to remember:
• 10th March 2022: all existing trusts need to register or update their records if they are already registered.
• The 30-day rule: all new Trusts and updates will need to be registered within 30 days. There is currently a transition period for this rule, which comes to an end on 9th February 2022. An exception to this is Trusts created by Will, since administering an estate following death may be expected to take longer than 30 days.
Failure to register can result in £100 fixed penalties as well as nudge letters, although higher penalties may be introduced for Trustees that deliberately ignore the registration rules.
Although some types of Trust will be exempt (see page 6 of the Government’s consultation response*), it is worth noting that bare trusts are not exempt and will need to register.
The latest rules on registration are just one example of how the role of a Trustee and the responsibilities involved have expanded in recent years. Today, Trustees must perform duties as specified in the Trustee Act 2000, as well as be conversant with trust terms and understand numerous complex regulations. Trustees also have considerable administrative duties, including preparing tax reports, accounts and returns, and administering payments. In addition, they have a duty to review the suitability of investments and consider the tax implications of any decisions. They also have a duty to act impartially, balancing the needs of the settlor whilst understanding their responsibilities to the beneficiaries.
All of these tasks can be a considerable burden for a lay Trustee and ensuring full adherence to all the rules and regulations can be arduous and difficult. This is why more and more families are choosing to use Professional Trustees to help manage their affairs. Our in-house Trustee service, WAY Tax and Trustee Advisory Services Ltd, offers a professional and expert Trustee service for all types of Trust – those provided by WAY Investment Services as well as other types of Trust. Keeping up with changes to legislation is just one of many jobs our Professional Trustees do on a daily basis. By nature of their expertise and independence, our Professional Trustees are able to meet all their legal and administrative responsibilities without conflict of interest, providing peace of mind to families.
To find out more about WAY Professional Trustee Services team:
Or speak with your Financial Planner