Trust Registration Service By Angel Trust Family
The Trusts Registration Service (TRS) is an online service. It provides an exclusive way for trustees and personal representatives of complex estates to meet their registration obligations. TRS has replaced the paper 41G (Trust) form and the ad hoc procedure for trustees to apprise HMRC (Her Majesty’s Revenue and Customs or HM Revenue and Customs) of changes in their circumstances. Those trusts that necessarily need to register with HMRC are now required to do it through the TRS.
Do You Need to Register Your Trust?
Do know the answer to this question; it is important to learn which type of trust needs to register on the TRS.
All Express Trusts in the UK where the trustees have incurred a tax liability in a given tax year are required to register their trust.
All non-UK express trusts that legally have UK assets or receive UK source income on which the trustees have incurred a UK tax liability in a particular tax year need to register.
The term Express Trust used above covers all trusts that have been established by a settlor. A UK tax liability for these purposes comprises a liability to capital gains tax, income tax, inheritance tax, or stamp duty land tax.
Since the 4G form did not have enough space and trusts were unable to provide sufficient information to cater to the requirements of the new legislation, those trusts which have already registered with HMRC before the launch of the TRS are required to use the service to provide complete information which is required now.
It is important to note that in case the trustees have not incurred a tax liability due to the fact that they have claimed a relief or because the liability falls on the settlor or on a beneficiary, then there is no requirement for Trust Registration Service registration. This applied in the cases
- Where income is mandated directly to an interest in possession beneficiary.
- Trusts that have no other UK tax liability other than a tax liability of less than £100 on bank
- Building society’s interest income is also exempted from the requirement to register.
Position for trusts that have invested entirely in non-income-producing assets such as capital redemption policies or life insurance investment bonds
In this case, trusts do not need to register on the Trusts Registration Service (TRS) unless and until:
the payable event under the policy arises in a situation when the settlor is either a non-UK resident or deceased
there is a chargeable transfer for inheritance purposes (IHT purposes). This is due to the fact assets or funds greater than the settlor’s available nil rate band are added to the trust and the trustees pay the tax; or
An exit charge or periodic charge arises for IHT purposes.
In case a chargeable event arises under the policy while the settlor is a UK resident and he or she is alive, then the tax liability will be assessed on the settlor non on the trustees. Therefore, the trust will need not register at that time.
Registration is essential in one year in the case of a life policy trust. With that, no requirement for registering or updating will arise for many years to come – in fact until there is a further chargeable event.
If you are still not sure whether your trust should register, Book an appointment with our expert.