Recent months have seen Trustees grappling with key changes to the UK Trust Register
Since 2017, offshore trustees have been required to register non-UK trusts with HMRC to the extent that the trust was liable to UK Income Tax or Capital Gains tax. The “UK Trust Register”, as it is known, maintains a central register of the “beneficial ownership” of trusts, in accordance with the UK’s obligations under the EU’s fourth Money Laundering Directive.
The UK has now implemented domestic legislation to comply with the updated requirements of the EU’s fifth Money Laundering Directive, with the new laws being effective from 10 January 2020 via the Money Laundering and Terrorist Financing (Amendment) Regulations 2019. These new laws included a commitment to expand the Trust Register in line with EU requirements, with these new laws subsequently brought into effect from 10 March 2020.
Key Changes to the UK Trust Register
The new laws contain a number of important changes for offshore trustees. The main changes include:-
- The requirement to provide enhanced information on the “beneficial owners” of a Trust.
- The requirement for non-EU trusts to register, if they enter into a business relationship with a UK service provider or acquire UK real estate.
- Certain third parties, including UK service providers and persons who can demonstrate they have a legitimate interest, will be able to access information on the register.
- Trustees will have thirty days from the original settlement, or 30 days from the date any information changes, to report the relevant information to HMRC. This places ongoing requirements on the Trustees to ensure the correct information is maintained on the register.
Trustees have until 10 March 2022 to ensure that the trust complies with the expanded requirements.
If a Trust is already registered, this means the additional information on the beneficial ownership must be provided by 10 March 2022. If the Trust is not already registered, but will need to be registered under the new rules, the registration must be submitted by 10 March 2022 as well.
For any new Trusts set up after 10 March 2022, or any existing Trusts that require registration after 10 March 2022, the Trustees will have until the 31 January following the end of the relevant tax year in which the requirement to register arose.
Once registered on the updated system, trustees will have 30 days from when they are aware of any changes to update the details.