Important! Countdown to penalties? Trust Registration deadline is looming...
If you have previously dealt with solicitors when preparing your Will or dealing with a bereavement, you may have recently heard about the new Trust Registration Service (TRS) requirements.
New laws have recently come into force meaning that any trust must now be registered with the TRS (which is part of the Government website). The deadline for registration is 1st September 2022.
What needs to be registered?
Whilst most people think of trusts as something for the wealthy, trusts are actually much more wide-ranging. Many people could be holding trust property, or benefitting from it, without even knowing!
The following are some common types of trusts that now need to be registered:
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A life interest trust in a Will – this structure is often used for care fee planning, or to protect assets for the children from a previous relationship;
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If you are acting under an Enduring Power of Attorney (EPA), a financial Lasting Power of Attorney (LPA) or a financial Deputyship created by the Court of Protection;
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If you are the Executor of a Will, and the deceased left gifts to a person who is under 18 or lacks capacity;
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If you are the Executor of a Will, and the deceased left gifts to people when they reach a certain age (eg. 21 years) and they haven’t reached that age yet;
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A discretionary trust (either in a Will or made during your lifetime) – where you put all of your assets into a pot and your trustees can decide who inherits what and when they get it;
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Most trusts created during your lifetime;
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Ownership of a property where a third party has an interest. For example, if you helped your child buy a house and they are the sole legal owner, but they are going to repay you when the property is eventually sold;
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Executors dealing with an estate that is not finalised within 2 years of the person’s death.
This is not an exhaustive list and if you are concerned,
you must approach a solicitor as soon as possible
to discuss if you need to register your trust.
What if I don’t register?
If you fail to register the trust by the 1st September 2022 deadline, you could be subject to financial penalties from HMRC. It is therefore vital that you seek advice if you have any concerns – as the deadline approaches, professionals will become busier and so the longer you leave it, the more likely you are to miss the deadline.
