Trusts can be used to mitigate Inheritance Tax and can be helpful for estate planning. They also remain a useful tool in protecting assets for vulnerable or disabled beneficiaries, providing for families which have children from different relationships or controlling the way in which funds are passed to family members.
Trusts can also be set up during a lifetime to receive funds from death in service benefits, pension funds and life assurance policies.
Requirement to Register Trusts
Previously, only trusts had to be registered with HMRC’s new online Trusts Registration Service (TRS) if the trust had a potential tax liability in regard to income tax, capital gains tax, inheritance tax or stamp duty land tax.
The new 5th Money Laundering Directive came into force on the 6th October 2020 which now requires all trusts to be registered with a few limited exceptions. The implementation of the Directive’s requirement to register trusts has been delayed owing to technical issues with the Government’s TRS but the TRS is now up and running and all trusts must be registered with HMRC on their online service by next September 2022 at the very latest.
If a trust does not come within the limited number of exceptions set out by HMRC, the trust must be registered with HMRC via the TRS and failure to do so, could result in a financial penalty for the trust.
If you are a trustee of Trust or hold any asset (e.g. a property for example) on behalf of another person who is not on the legal title, then the trust will need to be registered. If you wish to contact our in-house trust team to discuss this, then we will be pleased to assist.
If you wish to register the trust yourself then you can simply go online to the Government’s Trust Registration Service and set up a gateway account which will enable you to provide the correct information to HMRC
At Thomas Horton LLP, we are proud to have Solicitors who are STEP qualified and able to advise on the setting up, administration and winding up of both lifetime and Will Trusts.