HMRC Trust Registration Service – When is a declaration not a declaration plus other updates

Date posted: 9th Aug 2021

Back in 2017, HMRC launched the Trust Registration Service (TRS). Broadly, at that time any existing trust liable to pay tax was required to register with HMRC giving details such as trust settlors, trustees and beneficiaries. From that date any new trust with a tax liability also had to register the aforementioned details which also enabled the trust to be included in the Self Assessment Tax Return regime.

After the initial registration, it was intended the Trust Registration Service would be extended to enable trustees to update changes in trust details and circumstances. However, this was not possible until 2020. At this point the functionality of the TRS was extended and trustees could update trust information and subsequently make an annual declaration that the details were up to date. At this time (the 19/20 tax year and onwards) it also became necessary to complete a box on the Self Assessment Tax Return to confirm the declaration had been made via the TRS.

The latest round of changes being made to this system are to incorporate the requirements of 5MLD. An update at the beginning of May could however, lead professionals acting on behalf of trustees to think they have complied with their annual declaration requirements when in fact they have only completed the first of a two stage process.

When you log on to HMRC’s TRS for a preregistered trust you are now asked a short series of questions beginning with whether or not this is an express trust. These questions then lead to a declaration which must be submitted. This submission DOES NOT conclude the annual declaration for a trust. It is then necessary to log back into the TRS and either confirm or update the existing details for the trust and again complete the declaration prior to submitting. HMRC have improved the wording at the two stages which helps but it would still be easy to miss this point.

A more recent change relates to trusts making their first annual declaration. The process for this involves a trustee setting up a Government Gateway for the trust. They then have to ‘claim’ the trust by giving the correct answers to questions drawn from the original trust registration. If the latter was back in 2017 and summaries of the information entered at that time weren’t to hand this can be a tricky process.

HMRC recently announced they were removing this step although setting up the Government Gateway (and if applicable, authorising the trust’s agent) are still necessary. This change was to take effect from 29 June 2021. Please note HMRC have now announced this process will remain in place for the foreseeable future.

If you have any queries on this topic please give Elizabeth Layfield or Alison Welch a call or contact us here.


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