Changes to the Trust Registration Service (TRS) will widen the scope of which trusts fall under the remit of anti-money laundering directives. The amendments to the TRS means many trusts must now register before the 1 September, 2022 deadline.
TRS rule change widens scope
In 2017, the TRS was set up for trustees, which were liable to pay taxes, to register their trusts. In line with the adoption of the 5th Money Laundering Directive as of 6 October 2020, new rules have extended the scope of the trust register to UK and some non-UK trusts, regardless of whether or not the trust is liable to pay any tax.
What you need to know
Although some trusts are exempt from being required to register under the current wording of the regulations (such as those used for the provision of pension savings and group life benefits), self-funded Medical Trusts are required to register with the TRS.
Key dates
August 2021 – registration opened to non-tax paying trusts.
1 September 2022 – The deadline for all non-taxable trusts in existence on or after 6 October 2020 to register with the TRS.
Non-taxable trusts created after 1 September 2022 must register within 90 days of creation.
Missed deadline could cost you
Not registering by accident or not knowing you need to register will result in penalty charges (three months late registration is £100 and six months late registration will be £200). If it is found that you are deliberately not registering, these fines could be significantly higher.
What to do next
Although it may not have been the intention of the HRMC to include medical trusts, the current wording of the regulation would mean that trustees should look to register such trusts with the TRS by the 1 September deadline. It is the responsibility of trustees to assess whether their trust has to be registered. At the time of writing, the majority of administrators within the medical trust and master trust market are starting the registration process.
Information on this and how to register can be found in the HMRC Trust Services Manual (opens a new window).
If you would like to discuss whether your trust must register, what impact this may have on your policies or operations, or more generally to receive advice around medical trust governance and administration please contact:
Chris Rofe, SVP, Head of Client Development
E: Chris.Rofe@lockton.com
T: +442079332876
