Happy 1st Birthday to the HMRC’s Trust Registration Service (TRS)!

Don’t be caught out. The initial deadline for the TRS registration system was on 1 September 2022. One year on, it’s worth reminding trustees of their obligations and some best practice.

TRS updates and penalties

All trusts need to be registered – with limited exception. Once registered, the information on the register must be kept up to date. HMRC have introduced a fixed penalty of £5,000 where registration or updates have been deliberately avoided. Updates include recording additional beneficiaries e.g. a birth of grandchild, changes of trustees, or a change of address. The deadline for updates is 90 days. 

TRS - classes of beneficiaries

Trusts are often set up to include a class of beneficiaries, rather than specifically named individuals.   Under the original TRS instructions we could include a “class” of beneficiaries. However, if a beneficiary can be identified within a class, then HMRC requires the details of that person to be added. 

So, a trust deed may state that the beneficiaries are “my daughter Mary and her children”. Mary has two children, Tom and Ben. Previously, you could refer to “Mary’s children” but now TRS needs to be updated to give personal information about Tom and Ben as well. 

TRS – proof of registration and discrepancy reporting

Regulations changed from 23 April 2023 so that financial institutions are now required to request a TRS ‘proof of registration’ from clients with whom they have an existing business relationship before they can undertake further work. A ‘proof of registration’ document is now available as an option in the trustees’ Government gateway account - it's a simple process to download the document required. 

If organisations request a 'proof of registration' and they find the information doesn't match their records, they're required to make enquiries of the trustees in order to agree their records. If they're unable to reach an agreement they're required to report discrepancies to HMRC and may restrict or stop undertaking transactions for the trust. It's therefore crucial that the TRS information is reviewed, updated and checked regularly.

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Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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