New regulations concerning UK Trusts

Due to a change in legislation, many Trustees are now required by law to register trusts with HMRC, even if the trust is not required to pay tax.

This new rule applies to nearly all trusts which were in existence on the 6th October 2020 and trusts that have come into existence since that date. If you have included a trust in your own Will, the trust will not come into effect until after you die.

A trust in a Will will need to be registered unless the trust it is wound up within 2 years of death.

The new rules apply to:

  • Trusts for children
  • Where money is left on trust until a child reaches 18/21/25 (unless the trust was created by the Will of a child’s parent/s).
  • Discretionary Trusts
  • Where money is placed in trust to be distributed at the discretion of the trustees.
  • Life Interest Trusts
  • Where a person places an asset in trust for a person for life and then after their death it passes to other beneficiaries (such as a home given on trust to a spouse for life and then to children).
  • Property Trusts

Where someone is registered as the owner (legal owner) but they are holding the property on trust for others (the beneficial owners) who are not named as the owners on the Land Registry Title or the property deeds.

The responsibility for registering a trust lies with the Trustees. Trustees will also need to ensure that the information given to HMRC is kept up-to-date and that HMRC are informed if the trust is brought to an end.

You can get more advice on whether your trust needs to be registered and what information your will require to register the trust from the Gov website using the link below.

www.gov.uk/guidance/register-a-trust-as-a-trustee#not-register

When you are ready to register your trust, you will need to follow the link on the page above to enter the Government Gateway.

The deadline for registering all trusts is September 2022 or 90 days from the date upon which any tax became payable.

Remember, you only need to register trusts in Wills if the trusts will still be running, two years after the death of the person who made the Will.

If you need more advice or information or if you would like help in registering your trust, please contact your local office for advice.

 

The contents of this article are for the purposes of general awareness only. They do not constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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