As part of an EU-backed anti-money laundering initiative in 2017, the UK introduced something called “The Trust Registration Service” - an online system in which trustees can register the trust an report on it’s transactions in an effort to ensure no trusts are being used as money laundering schemes. This new legislation was, of course, long and full of jargon. But we read it, so you won't have to.
What can be concluded is that, these regulations have made some existing and new trusts liable to HMRC, as a trust that generates an income is liable to pay tax.
This made income tax, capital gains tax, inheritance tax stamp duty reserve tax and stamp duty land tax all applicable.
All importantly, on the 1st September 2021, a 12-month deadline was set for all non-taxable trusts to be added to the TRS scheme. This also expanded on hold property in which beneficiaries live, hold investments bonds, or in some other way have a stream of income are now all required to register.
Yes, as you can expect, there are penalites in place for not taking the required steps, but HMRC are approaching this situatuon with a degree of care.
To begin the registration of your trust, contact us for guidance today.