Trust registration service update – filing deadline remains unchanged at 31 January 2018

The trust registration service (TRS) is the government’s response to the Fourth Money Laundering Directive, all new trusts must be registered, the form 41G(Trusts) previously used to notify HMRC of new trusts was withdrawn in April and all existing trusts must also be included on the register.  Every time there is a tax event in the trust the details on the register must be checked and updated if necessary.

Regular readers and private client practitioners will be aware that we have been working with HMRC to make the trust registration service better. Three areas we have been working on are:

  1. Extension of the filing deadline for trusts and complex estates incurring a tax liability for the first time in 2016/17 – the original deadline of 5 October 2017 has been extended twice and is now 5 January 2018.
  2. Simplification – changes we have helped to achieve include the requirement to give details of all beneficiaries in a class if they could be identified is now restricted to if they have received a benefit and trusts with no tax liability in 2016/17 even if they have been issued with a self-assessment do not have to register.
  3. Extension of the filing deadline for existing trusts with a tax liability in 2016/17 – HMRC advised us on 8 December that although the deadline has not been moved from 31 January 2018 penalties will not be imposed if the trust is registered by 5 March 2018. This announcement is welcome, but it is not what we want, the registration will still be late if not done by 31 January 2018 and many trustees and practitioners will find it unacceptable for the trust to be registered late albeit with no penalty.

The announcement that no penalty will be charged is confusing as it says:

“This applies for both trusts which are already registered for Self-Assessment (SA) and those which do not require to be registered for SA.”

Trusts that are not required to be registered for SA do not need to register on the TRS so would not be liable for a penalty in any event.

We will continue to press for an extension to the deadline.

The latest FAQ on the TRS can be found at the foot of this news item.