Trustees or their agents must register a trust using the TRS if the trust is liable to pay any of the following:
- Capital Gains Tax
- Income Tax
- Inheritance Tax
- Stamp Duty Land Tax
- Stamp Duty Reserve Tax
- Land and Buildings Transaction Tax (in Scotland)
- Land Transaction Tax (in Wales)
Full details can be found on the Government website.
The extension of the scheme from taxable to non-taxable trusts follows the UK’s adoption of the EU’s 5th Money Laundering Directive (5MLD). Trusts that were in existence on 6 October 2020 when the rules took effect, but which closed before the TRS was opened to non-taxable trusts on 1 September 2021, still need to be added to the register—and then immediately reported as ceased.
HMRC has also advised that the proposed regulations will expand the Schedule 3A list of non-taxable trusts which are excluded from the registration requirements to include:
- Healthcare policies
- Child bank accounts
If you’d like to discuss your existing trusts with a professional tax advisor, please do not hesitate to get in touch. Our tax team are experienced in dealing with trusts of all types and will ensure you’re complying with the new regulations.