Following our previous article (Update to the trust Register – July 2021) and Katy Stables’ recent update regarding the registration of non-taxable Trusts (Deadline for registering with the Trust Registration Service – Aug 2022), the deadline of 1 September 2022 is fast approaching and we are working hard with clients and contacts to register their Trusts ahead of the deadline.
Any new Trusts constituted must be registered within 90 days and so this is an ongoing requirement.
At the beginning of this month (2 August 2022) HMRC updated their manual to provide more information about penalties which may be levied for non-compliance against Trustees.
It has previously been advised that the late registration penalties on the Trust will be £100 for being up to three months late, £200 for up to six months late and £300 or up to 5% of any tax liability for being more than six months late registering. The tax liability penalty will not be due on non-taxable Trusts and to date we have not seen any levied on taxable Trusts.
In relation to Trustees, HMRC are planning to impose a £5,000 penalty, per offence, where there is a deliberate failure to register.
This would require HMRC to become aware of a Trust that has not been registered and a warning letter issued. If then the Trustees fail to register within a set time limit, a penalty may be issued to the lead Trustee.
There should be no penalty for innocent failures but where HMRC discovers a Trust which should have been registered, they will issue a ‘nudge’ letter to the Trustees advising on the need to register.
Trustees have a duty to ensure that the Trust Register (TRS) is kept up to date and notify any changes within 90 days. This can include changes to Trustees, Beneficiaries or Settlors or indeed on it becoming a taxable Trust.
Many professional firms are now asking for the TRS reference (URN or UTR) for their paperwork and this should be a reminder to Trustees to meet their filing requirements.
At Lambert Chapman LLP we offer a streamline service for registration of Trusts and will be happy to help.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.