A trust is a way for someone who owns assets, such as money, a house or shares, to transfer them to someone else. Although it is currently difficult to accurately estimate how many trusts there are in the UK, families have been using them for centuries to plan how they transfer money to future generations.

Trusts are not only for the very wealthy: they are also a useful tool for ordinary families. For example, a trust can prevent a disabled adult who is on benefits from losing their benefits if they inherited their parents’ estate. Even a relatively modest amount of money would be enough to cause difficulties for someone in this situation. A trust can give everyone involved peace of mind that no such difficulties will arise.

There are three main roles in a trust, which are the:

1. ‘Settlor’: the person who puts the assets in a trust.
2. ‘Trustee’: the person or people who manage the trust. For most trusts, having two to three trustees works best.
3. ‘Beneficiary’: the person who benefits from the trust. In the example above, it would be the disabled adult on benefits.

There are several different kinds of trusts. You can find out more about them in this briefing.

Why you may need to register your trust

The EU has passed legislation in recent years to tackle money laundering, which covers how trusts are run. In response, the UK government has brought in new legislation that requires people to register trusts.

How it works

HM Revenue and Customs (HMRC) set up the Trust Registration Service (TRS) in 2017. Although there are some exceptions, most trusts will need to be registered with the TRS by 1 September 2022. The exceptions include:

• Registered charitable trusts,
• Certain types of life insurance trusts that pay out only on death, serious illness or disablement, and
• Bank accounts held on behalf of minors or adults who have lost capacity.

You must register if the trust becomes, or is liable for any of the following taxes:

• Capital Gains Tax
• Income Tax
• Inheritance Tax
• Stamp Duty Land Tax
• Stamp Duty Reserve Tax
• Land and Buildings Transaction Tax (in Scotland)
• Land Transaction Tax (in Wales)

The following types of trusts must register even if they have no tax liability:

• all UK express trusts — unless they are specifically excluded (see here for those that are excluded)
• non-UK express trusts, like trusts that acquire land or property in the UK or have at least one trustee resident in the UK and enter into a ‘business relationship’ within the UK.

Trustees have up to 90 days to let the TRS know of any changes to the information it holds on the register. The law was changed in February 2022 to give people experiencing a bereavement more time to notify the TRS of any changes.

How to register a trust

This briefing gives a brief overview of the registration process. The HMRC website gives full details and all the information that a ‘lead trustee’ will need to provide, including a Government Gateway User ID.

Find out more about registering trusts here

If you are not sure whether you need to register, talk to a qualified professional advisor about what you need to do to ensure you remain fully compliant.