Trust Registration Service (TRS): A Guide for Accountants

The Trust Registration Service (TRS) is HMRC's online register of trusts. Accountants meet it in two ways: clients who are trustees may ask you to register or update a trust, and your own anti-money laundering (AML) checks often involve trusts as part of a client's ownership structure. This guide explains which trusts must register, which are excluded, the deadlines, and the annual declaration. It draws on the government's guidance on registering a trust. The rules have exceptions and change over time, so check the current guidance on gov.uk before you advise a client. This is general information, not legal advice.

Taxable and non-taxable trusts

According to the government's guidance, the TRS distinguishes between taxable and non-taxable trusts. A taxable trust has a liability to a UK tax, such as income tax or capital gains tax. A non-taxable trust does not, but many still have to register unless they are specifically excluded. That is why the first question for any trust is not "does it pay tax?" but "is it excluded?"

Which trusts are excluded?

Schedule 3A to the Money Laundering Regulations 2017 lists the excluded trusts. The government's guidance gives examples, and they include:

• a trust whose only assets are a bank account and cash up to £2,000, with certain conditions about its purpose and its funds being held in that account;
• trusts set up by statute, certain pension trusts, charitable trusts and life insurance trusts;
• will trusts that close within two years of the death;
• co-ownership arrangements, where the trust arises because people own an asset together;
• a small trust where the settlor and trustees have no UK land or property, the total value of the property held is within the guidance's limits, the trust's income is below £5,000 a year, and there is no UK tax liability.

The guidance also notes that only one trust per settlor can be treated as excluded on the small-trust basis. Read the list in full, because each exclusion has conditions, and keep a note of which one you relied on and why.

Registration deadlines

The government's guidance sets these deadlines:

• Non-taxable trusts created after 6 October 2020. Register within 90 days of creation.
• Taxable trusts created on or after 6 April 2021. Register within 90 days of the trust first having a liability.
• Changes. Update the register within 90 days of becoming aware of a change.

Note that the clock may start on a different date for older trusts, so check the guidance if you are dealing with a trust created before those dates.

The annual declaration

A trust that had a tax liability in a tax year must also make an annual declaration by 31 January following the end of that tax year. The government's guidance sets out which trusts need to do this, and the declaration is a separate step from registering or updating details.

What happens if a trust does not register?

The government's guidance states that the penalty for failing to register is £5,000. Late registration can also create problems with banks and other regulated firms, which routinely ask to see evidence that a trust is registered. For a firm, an unregistered trust is also a red flag worth recording in your due diligence.

How the TRS fits with your AML work

When a trust sits in a client's ownership chain, you need to identify the settlor, trustees and beneficiaries, and decide who the beneficial owners are. Our guide to ultimate beneficial ownership for accountants explains how to trace and record ownership through layers and trusts. In practice we suggest that you:

1. Ask for evidence of registration. Where a trust is required to register, request confirmation that it has done so.
2. Record the exclusion. If the trust says it is excluded, note which exclusion applies and ask for the basis.
3. Compare the register with your own evidence. If the details differ from the trust deed or what the client told you, follow the difference up.
4. Diarise deadlines. Mark the 90-day update window and the 31 January declaration date for trusts you act for.

For related guides, start with our AML and KYC guides hub, and see our CPD courses for training on due diligence and trusts.

Frequently asked questions

What is the Trust Registration Service?

HMRC's online service for registering trusts and keeping their details up to date.

Does a trust have to pay tax to register?

Not necessarily. Many non-taxable trusts must also register unless they are excluded under Schedule 3A.

How long do trustees have to register?

Generally 90 days, from creation for non-taxable trusts created after 6 October 2020, and from the first tax liability for taxable trusts created on or after 6 April 2021.

When is the annual declaration due?

By 31 January following each tax year in which the trust had a liability.

What is the penalty for not registering?

The government's guidance gives a penalty of £5,000 for failing to register.