When do non-UK trusts need to register with the UK’s Trust Registration Service?

The UK Trust Registration Service (TRS) has been extended from 6 October 2020 to cover all UK express trusts and some non-UK express trusts, unless specifically excluded. 

A trust which has a trustee who is resident in an EU Member States is likely to already be registered on that state’s trust register.  Such a trust would not also need to register on the UK TRS unless it has a UK tax liability or acquires UK real estate. 

Non-UK trusts that will need to register on the UK TRS include:

1. A non-UK trust which is an express trust and receives income from a source in the United Kingdom or has assets in the United Kingdom, on which it is liable to pay one or more of the taxes referred to in regulation 45(14); being Income Tax, Capital Gains Tax, Inheritance Tax, Stamp Duty Land Tax (or Welsh/Scottish equivalent) or Stamp Duty Reserve Tax;
2. Any other non-UK trust which is an express trust, is not an excluded trust (see below) and whose trustees (in their capacity as such):
   
   1. acquire an interest in land in the United Kingdom; or
   2. enter into a business relationship with a relevant person, where at least one of those trustees is resident in the United Kingdom and the trust is not an EEA registered trust.

Excluded Express Trusts

Certain trusts do not need to register unless they are liable to UK tax (and therefore a registerable taxable trust). This is because they are considered lower risk for money laundering or terrorist financing.

These trusts include:

• trusts used to hold money or assets of a UK-registered pension scheme, such as an occupational pension scheme

• trusts used to hold life or retirement policies providing that the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured

• trusts holding insurance policy benefits received after the death of the person assured, providing the benefits are paid out from the trust within 2 years of the death

• charitable trusts which are registered as a charity in the UK or which are not required to register as a charity
• ‘pilot’ trusts which were set up before 6 October 2020 and which hold no more than £100 – pilot trusts set up after 6 October 2020 will need to register

• co-ownership trusts set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’

• will trusts which are created by a person’s will and come into effect on their death providing they only hold the estate assets for up to 2 years after the person’s death

• trusts for bereaved children under 18 or adults aged 18 to 25 set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme

• ‘financial’ or ‘commercial’ trusts created in the course of professional services or business transactions for holding client money or other assets.

For further guidance on how these changes affect you, speak to one of our experts

The rules surrounding UK TRS are complex. If you think you may be affected by the changes and have any questions regarding the UK Trust Registration Service, or would like to discuss any further tax matters, please get in touch or contact your usual MHA advisor.