The New Trust Register - what it might mean for you

technicalsupport Jun 5th, 2017

The Trusts Registration Service is expected to be up and running by July 2017 as an online service for lead and corporate trustees that will build on existing tax reporting mechanisms.

Typically, the trusts that need to be recorded are those created during lifetime, or in the will of a deceased person. And crucially it is only those trusts, both UK and non-UK resident trusts, which have some UK tax to pay.

The new regime will apply to Discretionary Trusts, but not to trusts created under intestacy or Bare trusts. A bare trust is a basic trust in which the beneficiary has the absolute right to the capital and assets within the trust, as well as the income generated from those assets. Consequently, the beneficiary is personally liable for income tax and capital gains tax arising within the trust, reported via a self-assessment tax return.

The requirement for a trust register is by virtue of the EU’s Fourth Money Laundering Directive (4MLD). The register will be in line with HMRC’s digital strategy and is intended to provide greater tax transparency going forward. However, this will introduce another level of regulation for trusts and advisers to deal with.

Trustees will need to update the register each year that the trust generates a UK tax consequence. This could be a liability to income tax, capital gains tax, inheritance tax or stamp duty land tax. Also, trustees must ensure and confirm the Trust Register is accurate and up to date, guaranteeing their obligations under 4MLD are complied with. This includes those trusts that have already registered with HMRC using the 41G(Trust) form.

Detailed information will need to be gathered on the trust and all parties to it - i.e. the settlors, trustees and beneficiaries. Previously when notifying HMRC of the creation of a trust (the paper form 41G, now withdrawn), beneficiary details were not needed.

The register will ask for:

  • Details of the trust assets including address(es) and values; and
  • The identity of the Settlor, trustees, protector (if any), all other persons exercising effective control over the trust (if any) and the beneficiaries or class of beneficiaries.

The information required will include:

  • Name;
  • Date of birth;
  • National Insurance (NI) number if they are UK resident - unless a minor; and
  • An address and passport or ID number for non UK residents, if there’s no NI number.