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Should you be registering a Trust?

From September 1st 2022 it has been mandatory to register some trusts with HMRC (as you would when you need to register for self-assessment). If the trust was already in place prior to 1st September, then it should have been registered on this date and if the trust has been created since then it should be registered within 90 days of creation.

The kind of trusts you need to register are now, in the main, all of them!

Taxable Trusts – any tax which pays tax on income, capital gains, inheritance tax, stand duty land tax or stamp duty reserve tax must register.

In addition, any trust which does not need to pay tax must register unless any of the following apply:

  • holds money or assets of a UK registered pension scheme - like an occupational pension scheme.

  • holds life or retirement policies (as long as the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured)

  • holds insurance policy benefits received after the person assured has died (as long as the benefits are paid out from the trust within 2 years of their death)

  • is a charitable trust that is registered as a charity in the UK or which is not required to register as a charity.

  • is a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100 - pilot trusts set up on or after 6 October 2020 need to register.

  • is a co-ownership trust set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’.

  • is a will trust created by a person’s will and comes into effect when they die (as long as they only hold the estate assets for up to 2 years after the person’s death)

  • is for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme.

  • is a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets.

You may be a nominee for your child or grandchild as you hold a Junior ISA or shares in a company on their behalf. This is a bare trust and these also need to be registered.

If you are unsure about whether you have a trust and if it should be registered, then please get in touch to take advice.

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