Trustees? Why action is needed right NOW says legal expert

by | May 26, 2022

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Laura Bywater, Head of Wealth Protection, Price Slater Gawne

The deadline for trustees to register non-taxable trusts on HMRC’s Trust Registration Service is fast approaching. Trustees must act now to be compliant and avoid penalties.

The Trust Registration Service (TRS) is nothing new. It has been in operation since the introduction of the Fourth Money Laundering Directive in 2017, the main aim of which was to improve transparency around the beneficial ownership of assets held in express trusts with UK tax liabilities.

As part of the implementation of the Fifth Anti-Money Laundering Directive in 2020, the scope of trust registration was extended to bring express trusts under the TRS regime even if they do not have any UK tax liabilities. Essentially, express trusts that previously did not require registration will now more than likely require registration on the TRS.



Trusts set up before 4 June 2022 must register on the TRS before 1 September 2022. Trusts set up after 4 June 2022 must register on the TRS within 90 days of creation. This means that Trustees now have just three months to fulfil their legal obligations in relation to the TRS. This will no doubt be news to some advisors and many lay trustees.

The Society of Trust and Estate Practitioners (STEP) has previously indicated that c£2 million trusts will now require registration on the TRS. At my last check, only 153,241 trusts have been registered on the TRS which indicates huge unawareness or non-compliance. Will there now be a trustee rush to beat the deadline, or do we need to be concerned?


Express Trusts

The legal requirement is that all UK express trusts must be registered on the TRS, unless they fall under a small number of exemptions. An express trust is a trust created deliberately by a settlor, usually (but not always) in the form of a document such as a deed or declaration of trust.

Most trusts are express trusts. An express trust can be created during lifetime and also by will, to take effect on death. Express trusts include discretionary trusts, interest in possession trusts, gift trusts, gift and loan trusts, discounted gift plans, shareholder protection trusts, employee ownership trusts, bare trusts and will trusts not wound up within two years of death.



There are a small number of exemptions that will fall outside the TRS regime (although there is an exception for trusts that are liable to pay UK tax which will still need to register). Exempt trusts include:

· Pension trusts


· Trusts imposed by statute such as on intestacy or bankruptcy

· Co-ownership trusts where the legal and beneficial owners are the same persons commonly found where a couple jointly own their home or have a joint bank account

· Trusts set up before 6 October 2020 holding assets valued at less than £100


· Will trusts which are wound up within two years of death

· Trusts of life policies paying out on death, terminal illness or disabilities

· UK charitable trusts


· Trusts created to set up a bank account for children or vulnerable persons

Earlier commentators had hoped that bare trusts might fall out of the scope of the TRS regime. This was based on the rationale that any UK tax liabilities falls on the beneficiary of the bare trust and not the trustees. However bare trusts are not exempt and must therefore register on the TRS.

Legal obligations

The legal obligation for registration lies with the trustees of the trust and not the settlors. This may be a surprise for many trustees. There is a responsibility on the trustees to be proactive. It can often be unclear as to whether a trust requires registration or not.

Trustees should take specific legal advice to establish their obligations given the fast-approaching deadline for registration. Where there are multiple trustees, they must collectively decide and appoint a lead trustee to complete the registration process. All trustees are equally legally responsible for the trust and the nominated ‘lead’ trustee is simply the main point of contact for HMRC.

HMRC require a lot of information about the trust, settlors, trustees and beneficiaries that may not be readily available. The gathering of information can take time and it is important that trustees give themselves sufficient time to obtain such information in order that they can meet their registration obligations. HMRC and professional advisors are likely to be very busy approaching the deadline!


A failure to register a trust or a failure to notify any change of information on the TRS can result in increased trustee administration and penalties issued by HMRC. Reports indicate a £100 penalty for failure to register or update the TRS details within the relevant time limits.

Act now

So, what should you, your clients and all trustees be doing now? A review of all lifetime trusts and will trusts is absolutely essential. The TRS can be a complex area to navigate, so if you are or work with a trustee of a trust or a settlor of a trust and are unsure if the trust falls within the scope of the TRS then please do get in touch with our TRS team who will be able to offer guidance and assistance as well as deal with the TRS for and on behalf of you and/or your clients.

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