Update on Trust Registration Requirements
With HMRC’s deadline for registering trusts with the Trust Registration Service (TRS) on 1 September 2022, HMRC has provided an update on their current position covering both the UK TRS and the Irish Central Register of Beneficial Ownership of Trusts (CRBOT) for offshore bonds.
UK Trust Registration Service
In recognition of the fact that the registration requirement is new and an unfamiliar obligation for many trustees, HMRC is using discretion unless the failure is due to deliberate behaviour on the part of trustees.
Where failures to register are due to deliberate behaviour on the part of the trustees, a £5,000 penalty may be charged per offence (this is in place of the previous penalty regime of up to £300 per offence).
In practice this means that should HMRC become aware of a trust which has not been registered by the relevant deadline – either because that trust has been registered late or because HMRC has identified that trust’s existence by other means – HMRC will issue a reminder/warning letter to the trustee or agent. If the trust is not yet registered, the trustee or agent should register at that point. If the trustee or agent then fails to register the trust within the time stated within the reminder/warning letter, or fails to explain why the trust is not required to register, a penalty may be issued to the lead trustee.
Penalties for deliberate non-compliance will be applied on a case-by-case basis – examples of the circumstances in which a penalty might apply include:
• continued failure to register a trust following repeated warnings
• providing details on a given trust that are deliberately inaccurate, accompanied by continued failure to amend those details.
Trustees can register their trust at https://www.gov.uk/guidance/register-a-trust-as-a-trustee and a step by step guide to registering a trust can be found here https://www.origenfs.co.uk/news/Trust-Registration-guidance.aspx
UK Trusts holding Dublin based offshore bonds
A UK trust holding a Dublin based offshore bond is required to register on both the UK TRS and the Irish Central Register of Beneficial Ownership of Trusts (CRBOT).
However there has been considerable uncertainly following concerns raised by the Association of International Life Offices regarding the difficulties faced by UK trustees due to the initial complexities of the registration process. The Irish Revenue has acknowledged this and as a result has confirmed that it is working on simplifying the process and will be issuing updated instructions on how to register UK trusts on the CRBOT. Furthermore, it has publicly stated that, “Revenue recognised the genuine difficulties for some trustees in registering on time. Trustees are reminded that they can register after the deadline. Such instances will not be considered a failure to comply with the requirement to register, provided trustees complete their registration within a reasonable period.”
Based on this most recent update, unless trustees have already completed the registration of the trust on CRBOT, they should now wait until further guidance on the simplified registration process is published before registering the trust. Trustees should however still proceed with registering the trust on the UK TRS, pending clarification of the CRBOT registration process from the Irish Revenue.
UK Trusts with offshore bonds based in other overseas jurisdictions
Our understanding at this time is that trustees holding offshore bonds in other overseas jurisdictions, such as the Isle of Man, need only to register on the UK TRS.
CA8484 Exp:09/2023
[ Date Posted: 05/09/2022 15:00:04 ]
