A large number of trusts will need to be registered by the deadline of 1 September 2022 if trustees are to meet their obligations. Given the turbulent times of the last couple of years, trustees may understandably have missed the widening of the Trust Registration Service's ("TRS") ambit. However as registration will be needed in some circumstances for professional advisors to act (and non-compliance itself may attract penalties), trustees should consider their obligations as a priority before the summer months – especially as gathering the required information may take some time.
Under the original scope of the TRS, trusts created before 6 April 2021 with a UK tax liability incurred after 6 April 2016 were obliged to register. Those rules continue to apply, so if those trusts have not registered, they need to complete a late registration as soon as possible.
The enhanced scope of the TRS extended filing obligations to all UK trusts (even if they did not have a UK tax liability) and to non UK trusts with a specified connection to the UK (including acquiring UK real estate). The number of trusts which will be caught by this extension is significant, especially as the scope includes bare trusts.
Whilst trustees of UK bare trusts may well be currently unaware of their new obligations, one of the more widely published consequences to the expanded ambit of the TRS is the changed position for non UK bare trusts which have acquired UK land. Non UK trusts which had a UK tax liability have always been in scope, so non UK trusts with UK tax liabilities arising from a trust directly acquiring or holding UK land, are currently registrable. However the tax liability needed to fall on the trustees themselves (with the assets also being held directly by the trust). The wider application of the TRS means that non UK trustees who hold UK land on bare trust (so the trustees themselves are not directly liable to UK tax on the trust assets) which they acquired on or after 6 October 2020, now have an obligation to register by the September deadline.
Given the current developments with the Register of Overseas Entities, the beneficial ownership of structures has never been more of a hot topic. However those within the TRS and concerned regarding confidentiality, will no doubt be relieved that (in contrast to other registers) the information on the TRS will not be generally available to the public. Instead, access will be restricted and we expect that in most cases will be subject to demonstrating a legitimate interest in the specified information sought.
The TRS rules are complicated – if you are at all unsure if you or your clients are caught (guidance in our decision tree below – although please note this does not constitute advice), please get in touch with your Taylor Wessing contact. With the deadline date of 1 September rapidly approaching, time is of the essence!