Are you wondering what actually Family Trust Registration is all about? You may know that trust helps clients manage your assets and property with the intention that they are distributed among family members after your death as per your wishes. This leads to saving your money, time, and paperwork. Typically, a family trust is traditional. However, it is designed with an aim to keep the main parties within a family.
Main Types of Family Trusts
- Non-trading trust – This is a traditional style of family trust and often described as “Passive Trust.” This traditional style of family trust comes in handy where an asset like a holiday home or family home is to be transferred primarily for asset protection.
- Non-trading and income-producing -This trust is also a traditional style of family trust known as ‘Passive Trust.’ This type of trust is used for the purpose of transferring income-earning assets, including share portfolios, properties, and more. The main objective of this trust is to provide protection to assets and spread income to beneficiaries. This can also be used for owning assets that can be rented to a trading company.
Key purpose of a family trust registration
A family trust registration is a type of legal advice. It is basically required for avoiding probate, delay in taxes, and protection of assets.
Information required when getting family trust registration
When you hire a family trust registration service provider, the TRS (trust registration service) will ask for the following pieces of information to share:
- The name of your trust
- Your contact address and contact number
- The exact date when your trust was founded
- The name of the country where the trust is established
- Details of your trust assets, such as addresses of properties
- An estimated market valuation of assets held
- Moreover, you need to share details like name, address, date of birth, and NI (or passport /ID number if no NI) number) of the settlor, trustees, the beneficiaries
- You also need to share details of the class of beneficiaries where individual beneficiaries have yet to be determined or identified)
- Also, disclose the details of any individual (such as a protector or appointor) exercising effective control over the trust
Besides the above information, if any agents acting on behalf of trustees, they also need to provide contact information about themselves. However, please note that there is no need to share details of other advisers who are providing you with legal, financial or tax advice.
Providers of trust documents and financial advisers
There are no registration responsibilities or we can say TRS obligations for the company that is providing trust documents and financial advice. But, a Family Trust consultant needs to make sure they are fully aware of clients’ reporting obligations under the new regulations. Moreover, consultants must also make clients aware of new TRS obligations as a part of their advice process.
What should be disclosed about beneficiaries?
Under the Trust Registration Service, you will need to disclose to HMRC (Her Majesty’s Revenue and Customs) the names or identities of all beneficiaries who are either potential or actual beneficiaries. In case there are no details of the beneficiaries of the trust but there is a class of beneficiaries, then recording a description of the class of beneficiaries with the TRS is mandatory.
Keep in mind as a trustee, you need to share the identity of any prospective beneficiary who you think is liable for receiving financial or non-financial benefits from the trust.