The Trust Registration Service (TRS) is an online register of the beneficial ownership of trusts. New rules were introduced in October 2020, requiring trusts to register with the TRS by 1st September 2022.
If you hold land on trust for others, or operate a farming partnership, these rules are likely to apply to you.
As this deadline has passed, you must ensure that you have done what you needed to do.
When does this apply?
- land held by individuals for the benefit of themselves and others;
- land held by individuals for the benefit of others (not themselves); and
- land held as a partnership asset by some, but not all partners.
The Trust Registration Service (TRS) further guidance states that property purchased by a partner with partnership money, only needs to be registered where there is a written trust declaration.
- For example: farmland being registered in the names of A & B but held on trust for a partnership of A, B, C & D.
What needed to be registered?
- UK express trusts
- Non-UK resident acquiring UK real estate
- Non-UK with UK trustees entering into a business relationship with a UK obliged entity
- Non-UK trusts that become liable for NRCGT
- Unregistered pension trusts and trusts of pension death benefits
- Complex estates
What information needs to be provided?
Trusts liable for UK tax (such as SDLT on a transfer of land):
- Information about the trust
- Information on assets held by the trust at time of registration
- Information on each beneficial owner of the trust
Trusts not liable for UK tax:
- Details of the beneficiaries
- Whether the trust has a UTR
Key Deadlines for the Trust Registration Service (TRS)
Trusts should have been registered by 1st September 2022.
Trusts set up on or after 4 June 2022 must be registered within 90 days of the trustees becoming liable to pay UK taxes.
Once registered, trustees have 90 days from when they become aware of any changes to update the register.
It is also a requirement to update the register and renew the registration annually, and if the trust is taxable, this must be done by 31st January after the end of the tax year in which the liability arises.
There are two offences to be aware of:
- Failure to register on time
- Failure to update the register
These may lead to a financial penalty (can be appealed). However, there won’t be a penalty for first offences unless it was shown to be a deliberate failure by the trustees. Therefore if you haven’t already registered your trust, you need to make sure you do it straight away!
If the failure was shown to have been deliberate, a £5000 penalty may be charged for each offence.
If you have any further questions regarding the Trust Registration Service (TRS) please contact our Rural Property team.