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Are you a trustee of a trust?

Do you know that as a result of the fifth amendment to the Anti Money Laundering Directives you may now be required to register the trust for which you have responsibility with H M Revenue & Customs?

The technical elements of trust management have never been straightforward but this latest duty placed on trustees adds another level of administration. In previous anti money laundering legislation it was necessary to register a UK trust with H M Revenue & Customs if it fell into one of four categories:-

  • all UK express trusts regardless of whether they have a UK tax liability

  • non UK express trusts with a UK tax liability

  • non UK express trusts which acquire UK land

  • non UK express trusts which have at least one UK resident trustee and enter into a UK business relationship

For those of us who like to understand what legal speak really means an express trust is one that is intentionally created by the owner of property to provide specific instructions on how property within the trust should be used. It is usually in writing. An express trust is not one that is inferred from the law. For example an express trust may be a trust set up during someone's lifetime to help pay grandchildren's school fees or to protect assets from care charges. It could be created under the terms of a will. A trust that is inferred by the law is usually known as an implied trust and is one that had not been expressly created by an individual. For the purposes of this article we are not looking at inferred trusts.

There are some trusts which are excluded from the requirement to register. These are known as exempt trusts. You are exempt from registration if you are a trustee of a trust which is:-

  • created under the terms of a will and holds property which the deceased owned at death and is only in existence for less than two years

  • a statutory trusts which arise on an intestacy

  • an insurance policy or death benefit trusts

  • a pilot trusts

  • a co-ownership property trusts

  • a charitable trusts

  • a bereaved minor trusts

  • a disabled persons trusts

  • a personal injury trusts

  • a trust imposed by statute or court order

However, being classified as an exempt trust is overruled if the trust receives income.

Under the new rules trusts are dividend into four categories; type A, B , C and D. It depends on the category of trust your trust falls within as to the action you need to take.

It is really important that you take advice as to category in which your trust falls into so that you can deal with the registration formalities. There are going to be sanctions if the trustees do not comply as the obligation is placed on their shoulders to deal with registration. Registration should have been completed by the spring of 2021. However, H M Revenue & Customs have advised that due to difficulties and issues with the Trust Registration Service they are extending the registration time period for newly qualifying trusts to the summer of 2021 rather than in the spring as was originally planned.

As a trustee you do need to be careful as there are different timings for registering different trusts and penalties if you fail to act as you should.

For more information about the Trust Registration Service and what this means for you give us a call on 01622 843729 for further information


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