Calling all trustees: how the Trust Registration Service changes affect you
This guidance note provides an overview of the rules as we understand them at the time of writing, and they may change.
This material is provided for guidance only and doesn’t constitute legal or financial advice – if you’re unsure about what you need to do, you should speak to a legal or financial adviser. For the latest information on the rules, see the government website.
What’s the Trust Registration Service?
Under the UK’s anti-money laundering rules, trustees must register certain trusts with HMRC’s Trust Registration Service (TRS). There are important changes to these rules which will apply from 1 September 2022.
Previously you just needed to register taxable relevant trusts which included UK express trusts if they were subject to certain taxes including:
- Income tax
- Capital gains tax
- Inheritance tax
There are exemptions that mean certain trusts may not need to be registered.
You may now need to register trusts that you didn’t previously need to
New rules mean all UK express trusts – no matter whether they pay UK tax – need to be registered with the TRS, unless there are exemptions. The new rules apply to any trusts that have been active on or after 6 October 2020, even if they’ve ended since that time.
It’s the trustee’s responsibility to make sure they’ve registered the trusts. This material covers the registration requirements for UK express trusts but there are also new rules for non-UK express trusts. You can find more details about these on the government website.
From your money to your insurance policies, here are some of the products it affects
Any trusts that hold our products could be impacted by the rules. If you’re the trustee, you’ll need to decide which ones need to be registered after reviewing the exemptions. Below are details of some of our products and what, if anything, the trustee needs to do. This guidance doesn’t cover trusts which may hold assets other than these products.
|Our products||What the trustee needs to do|
|Pensions||Pension schemes held in trust that are already registered under part 4 of the Finance Act 2004 don’t need to be registered with the TRS. For these pensions no action is required.|
|Investment bonds / Endowments||If held in a trust that was active on or after 6 October 2020 the trust needs to be registered with the TRS.|
|Life insurance policies – new business|| |
You don’t need to register the trust if the insurance policy only pays out:
• when someone insured on the policy passes away, has a terminal or critical illness or becomes permanently or temporarily disabled
• to cover medical costs of someone insured on the policy
If a policy in a trust doesn’t meet the above criteria and/or the trust includes non-insurance assets, the trust will need to be registered with the TRS.
|Life insurance policies – Surrender|| |
The trust will need to be registered with the TRS if we pay-out the surrender value to the trustees.
|Life insurance policies – claim on death|| |
If someone insured under the policy passes away, the trust holding their life insurance policy won’t need to be registered with the TRS for two years from the date the person dies – but it may need to be registered after this.
Life insurance policies
• Terminal illness
• Critical illness
• Becoming temporarily or permanently disabled.
The trust doesn’t need to be registered unless one of the events listed happens. The trust will need to be registered with the TRS if we pay-out to the trustees following one of these events taking place.
Current Group Life Schemes
Group life schemes written under trust don’t need to be registered with the TRS.
This will still be the case when someone insured under the policy passes away, for a period of two years from the date of their death.
The trust will need to be registered if the trustees keep the assets for more than two years from the date of death.
|Corporate/Group Healthcare Trust Administration||The trust will need to be registered with the TRS if it doesn’t fall within any of the exemptions.|
Here’s what the registration process will look like
The trust needs to be registered online. Although all trustees are legally responsible for the trust, they must choose a lead trustee to be a main point of contact for HMRC. They could also authorise an agent to register the trust on their behalf. As part of the process, the lead trustee will need to give details of:
- The trust
- The settlor
- All trustees
- Any beneficiaries
You can find the full list of information on the government website.
Your registration deadline depends on when your trust started
Registrable non-taxable UK express trusts that were active on or after 6 October 2020, including trusts which have since ended, need to be a registered with the TRS by 1 September 2022 or within 90 days of them being created, whichever happens last. Let’s say your trust starts on 31 July 2022, it needs to be registered within the following 90 days.
Once a trust is registered, it’s the trustee’s ongoing responsibility to make sure the registration details are kept up to date. If the trust details or beneficial ownership information changes, then the details must be updated with the TRS within 90 days of the trustees becoming aware.
What happens if you don’t register?
HMRC may fine trustees that don’t follow these new rules.
We may ask to see evidence of your registration for products that you hold with us – you can download the relevant information from the TRS once you’re all up and registered. If you can’t show us proof, we may not be able to set up your policy or send you your payment right away.