Last month we reported on the proposed changes to expand the scope of the Trust Registration Service (TRS) as a result of the EU Fifth Anti-Money Directive (5AMLD). Following a technical consultation the UK government has now published its conclusions. The main outcomes are summarised below.
Following consultation there was an increase in the type of trusts which are exempt from registration with the TRS. Some of the trusts which are now exempt are as follows:
- UK registered pension trusts
- Charitable trusts regulated in the UK
- Trusts for vulnerable beneficiaries or bereaved minors
- Personal injury trusts
- Maintenance fund trusts
- Trusts that only receive death benefits from a life insurance policy and are wound up within two years of death
- Existing trusts holding assets valued at less than £100 unless or until further assets are added
Notably Bare Trusts have not been added to this list so must register. This has been met with lots of criticism.
Offshore Trusts entering in to business in the UK are now only required to register with the TRS if one of the Trustees is UK resident. The planned expansion of registration to include offshore trusts acquiring land and property in the UK has been maintained, albeit trusts who have already registered in another EU Member State will be exempt.
Various registration deadlines have been confirmed as follows:
- Existing trusts & updates to previously registered trusts – must register by 10 March 2022
- New trusts established after 10 March 2022 – must register within 30 days of the trust being set up
Failure to meet these deadlines will result in prompt letters and a fixed £100 penalty, however further penalties may be applicable where Trustees deliberately ignore registration deadlines.
Access to TRS Information
The proposal sought to increase access to TRS information from HMRC and law enforcement agencies only to those with a “legitimate interest”. Although upheld, the government has confirmed that each request for information will be reviewed on a case by case basis and that access to information will only be granted where there is evidence of money laundering or terrorist financing activity. The government will also ensure beneficiaries details are protected where there is seen to be an increased risk to the beneficiaries safety.
Although the government has widened the scope of the TRS, the outcome of the technical consultation is less cumbersome than first anticipated. With this being said these new regulations will mean that Trustees must consider whether their Trusts now fall within the new registration requirements. Where registration is necessary the appropriate information should be gathered and reported before the registration deadlines to avoid any penalties.
This is a summary and should not be relied upon and advice can be provided by your usual Turcan Connell tax and succession contact.