Call your local Lonsdale financial adviser on 01727 845500 about registering your trust

Call your local Lonsdale financial adviser on 01727 845500 about registering your trust

Read about upcoming changes to Trusts and Trust Registration Service deadlines

Thursday 26 May, 2022

Changes to Trust Registration

The deadline for registering express trusts with the Trust Registration Service (TRS) for the first time is September 1st2022. This will include many off the shelf estate planning trusts such as gift trusts, discounted gift trusts and loan trusts that previously didn’t require registration.

Existing trusts which have tax to pay (and currently complete an annual tax return) should have already registered, as the TRS is the mechanism by which trustees obtain the Unique Taxpayer Reference (UTR) needed to submit a self-assessment return. 

What is an express trust?

An express trust is a trust deliberately created by a settlor, usually in writing. They may be taxable or non-taxable. The majority of trusts recommended by financial advisers for tax and estate planning will be UK express trusts as they will usually use a deed from a product provider. These will often be non-taxable as the trust investment will be in life policies, including investment bonds, which do not produce natural income (capital withdrawals of 5% or less do not count as taxable income). 

Such trusts must now be registered by September 1st 2022 (or 90 days after creation if later) unless they are “excluded”. They will then be provided with a Unique Taxpayer Reference (UTR) if they are required to pay tax or a URN (Unique Reference Number) if they aren’t required to pay tax.

“Excluded” trusts include pure protection policies where the only benefit is a sum assured paid out on death and Will trusts, for the first two years after death.

Who is legally responsible for registering a trust?

The legal responsibility for registering falls on the trustees. They will need details of settlors, beneficiaries and provide information on the assets held within the trust.  They can do this themselves or appoint an agent to complete the registration.

Howard Goodship, chartered financial planner in Ringwood, Hampshire said: 

‘If you have set up a trust through a financial adviser to mitigate inheritance tax or are a trustee of a trust and haven’t previously been required to complete a tax return, it is likely the trust is not registered with the TRS. We strongly suggest you contact your financial adviser or accountant to discuss this as a matter of urgency. Alternatively, we are happy to meet for an initial chat and to review any of your trust arrangements. There is no charge for an initial meeting, and we may simply direct you to an agent who can complete the registration. Alternatively, if any further advice is needed, we would detail the required work and quote a fee in advance for your consideration. Complete our booking consultation form or contact your local financial adviser in Ringwood, Chippenham, St Albans, Ware, Leeds & Bradford, Stafford, Barnet or Harpenden.’

The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. The contents of this article are for information purposes only and do not constitute individual advice. Trusts and estate planning is not regulated by the Financial Conduct Authority.

 

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