Advisers concerned clients are risking HMRC fines over trusts

by | Aug 10, 2022

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Advisers are concerned about their clients risking HMRC fines, by failing to register trusts with the Trust Registration Service (TRS) by 1st September, according to new research from HSBC Life (UK), the HSBC Group’s insurance business.

The research found nearly two-thirds (62%) of advisers, with clients who are trustees or have interests in trusts, are concerned their clients could be risking fines; among this group 13% are very concerned. However, some advisers remain unaware of the forthcoming changes.

Incoming rules stipulate that any express trust must register details of the settlors, trustees, and beneficiaries with the TRS by 1 September 2022; any trusts created after this date will have 90 days to register. Discretionary and absolute trusts are subject to the rules, and this includes any discounted gift trust, loan trust and gift trust.

Advisers who have written investment bonds in trust for clients will find these clients are affected by the new rules, which have been created by TRS as part of changes in anti-money laundering regulations.


HSBC Life’s survey indicates that advisers are already working to support clients – around two in five (39%) have contacted clients about their responsibilities, and over a quarter (26%) plan to do so soon. Only a few (17%) have no plans to do so; but worryingly some (8%) admitted they’re unaware of the TRS.

HSBC Life (UK) has published information on its website about the Trust Registration Service and issued guidance about the steps that advisers and their clients must take to avoid potential HMRC fines, in the event of failing to register with the TRS. However, HSBC Life research reveals that more than a quarter of advisers (27%) believe their clients are unaware of their responsibilities under the TRS.

Mark Lambert, Head of Onshore Bond Distribution at HSBC Life (UK) Limited, said:


“Advisers are clearly concerned about the risk of fines for clients failing to comply with the new TRS rules. Where an onshore investment bond is used for inheritance tax and intergenerational planning, trusts are an important part of the solutions that advisers provide for their clients. HSBC Life is committed to supporting advisers and their clients, which is why we are highlighting that the requirement to register with the TRS must now be included as part of the process. 

“HSBC Life’s range of solutions covered by the new regulations includes the HSBC Life Onshore Investment Bond, where it has been placed in our discounted gift trust, loan trust, gift trust, and third- party trusts that have been used in conjunction with our bond.”

According to TRS rules, Trustees have the legal responsibility for registering the trust and need to nominate a lead trustee who will be the main point of contact with HMRC. Advisers will hold most of the information trustees need to register and HSBC Life believes their support will be invaluable in helping clients to update their records and meet the registration deadline.


Information required to register trusts will include the name of the trust, details of the settlor and trustees as well as named beneficiaries and classes of beneficiaries. Trustees may also need to provide additional information such as the country of general administration of the trust and confirmation of liability to income tax.

The table below outlines the range of support that advisers are offering to clients:

Guidance on registering 33%
Offering access to experts such as lawyers and accountants 28%
Reviewing their trusts ahead of the deadline 20%
Providing guidance on legal responsibilities 18%
Sending all information on their trust arrangements needed for registration 17%
Reviewing general IHT advice as part of the process 12%



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