By 1st September 2022, HMRC will require all new and existing trusts to be registered with the Trust Registration Service unless they are exempted. Until recently, only taxable trusts have been required to be registered within 90 days of their creation. These new rules have been estimated to encompass up to 1 million trusts that have not been registered so far.
In broad terms, a trust is a legal document created by a person (the ‘Settlor’) who puts property (assets of any type, whether personal or business) into it under the control of one or more persons (the ‘Trustees’) for the benefit of others (the ‘beneficiaries’) for a longstop period (usually a maximum of 125 years), but with flexibility to bring them to an end at any time at the discretion of the Trustees on the occurrence of specific events. They come in a variety of forms, depending on the Settlors’ objectives and the needs of the beneficiaries. They can be advantageous in assisting asset protection against lifetime crises, such as bankruptcy, divorce and disability and in providing for tax planning and tax savings: allowing for both life, retirement and after-life planning.
Trustees will be jointly liable for satisfying these new registration requirements, with the risk of fines and limitations on their ability to access professional advice should they should fail to do so. If, therefore, you are an existing settlor, trustee or beneficiary and need advice, including trust registration, or you are interested in discussing whether a trust is right for you, please contact our Trusts team who will be pleased to help.
Article written by Tim Logan and Lewis Barber.