Deadline dispensation but clock keeps ticking for trustees
Andrew Morgan is a Partner and Head of the Private Client department. He can be contacted on 01323 434414 or by email here.
Trustees who missed the September deadline to comply with the expanded scope of the Trust Registration regime have been thrown a lifeline by HMRC, with the news that penalties will not be imposed on those who missed the cut-off date through ignorance.
Introduced as part of the UK’s implementation of the Fifth Money Laundering Directive, the new rules are designed to counter terrorism and money laundering, with improved transparency on the ownership of assets held in trusts. They extend the scope of the trust register to all UK express trusts and some non-UK trusts, regardless of whether they pay tax.
Some trusts are excluded, in situations where they have a limited purpose and the structure is unlikely to be used for money laundering or financing terrorism, but generally more trusts are required to register, including UK resident trusts without UK tax liabilities and most bare trusts.
And for taxable trusts, more information has to be provided about beneficial owners, including the settlor, trustees, beneficiaries, and other parties who exercise control over the trust. This includes the name, month and year of birth, country of residence, nationality and details of their beneficial interest in the trust. The record on the register must be kept up to date with any changes notified within 90 days of taking place.
Andrew Morgan commented: “The easing by HMRC means penalties are unlikely to be imposed for those who missed the September deadline, unless they were acting deliberately. But the clock is ticking for all trustees to ensure they comply with the new requirements if they are to avoid potential fines, which can be up to £5,000 per trust.
“If you are involved in a trust and are not aware of any action having been taken, or are unsure whether you need to comply, it really is time to act swiftly and get specialist advice.”