The Trust Registration Service
What do I need to know as a Trustee or Personal Representative of an Estate?
You may be a Trustee of a Trust set up many years ago but as the regulations and obligations to HMRC change over time it is necessary for you to consider your reporting obligations ahead of the deadline for registration on the Trust Registration Service (TRS) on 1st September 2022.
Complex estates also must register on the TRS. Many trusts contained in wills will fall into the category for registration and as the duty to register falls on the Trustees personally it would be a good time to review your obligations ahead of the deadline for registration.
It is important to ensure you are up to date with the regulations and this article will briefly outline the new rules.
Contrast the old registration rules v Trust Registration service – who has to register and when ?
The TRS is an online service that provides the only route for trustees and personal representatives of complex estates to comply with their registration obligations following the EU’s 5th Money Laundering Directive (5MLD) which came into effect in UK law on 10 January 2020. The Directive affects all UK express trusts and many non-UK express trusts, and extends the coverage of the 4th Money Laundering Directive (4MLD), which itself passed into UK law on 26 June 2017.The 4MLD obligations related mainly to UK Express Trusts with a tax liability but 5 MLD moves away from the link to taxation alone and widened the definition of trusts which have to register.
The TRS replaces the older method of registering a trust with the 41 G form. Now it is the single point of contact to update HMRC about any changes to a trust. As a consequence of implementation of the Fifth Money Laundering Directive many more trusts, including some Will trusts arising on the death of the Settlor, some co-ownership trusts and other trusts used or which arise in commercial contexts, have to be registered with HMRC.
The legal responsibility for registration and updates lies with the trustees.
Where there is a trust with multiple trustees, it is a matter for the trustees to decide and appoint a lead trustee to complete the registration process. Whilst all trustees are equally legally responsible for the trust, the nominated ‘lead’ trustee is simply the main point of contact for HMRC. The trustees can appoint an agent to complete the registration process if they so wish.
Appointing an Agent to register the trust
If you appoint an agent to register the trust, the Trustees must authorise the agent to access the register to update it and make any changes. This includes the annual confirmation that there are no changes to record in a UK taxable trust record. Alternatively, the Trustees can choose a Lead Trustee to register and maintain the trust.
What happens if you were a Trustee but the trust came to an end in recent years and the trust had not been registered as at the time there was no tax liability when the trust ended?
HMRC has confirmed that trustees of trusts that were in existence on or after 6 October 2020 and have since ceased will also still need to:
- register these on the TRS, and
- immediately close the trust record
HMRC state that it will take a proportionate approach for any penalties or fines should any such trust come to its attention after the September 2022 deadline.
Types of Trust which have to be registered and maintained on the TRS
- Express trusts – This is a trust created by a settlor, usually recorded in document form such as a written deed or declaration of trust. However, an express trust does not need to be created in a settlor’s lifetime but also can be created by will, to take effect on their death. This is in contrast to a statutory trust which is not an express trust. This is a trust set up automatically under the terms of legislation. For example, in England and Wales the laws of intestacy provide for assets to be held in trust where the deceased dies without a will and leaves a surviving spouse and children.
- Certain non UK express trusts if there is a link with the UK – there could be UK based Trustees, the trust may hold UK land or enter into a business relationship with a UK based business
- Trusts that are not express trusts are generally not required to register as registrable express trusts but will have to do so if they have a UK tax liability in order to obtain a UTR number.
- Bare trusts were not originally required to register under 4 MLD but are required to do so under 5MLD.
The are some trusts which do not require registration under 4 and 5 MLD but when and if there is a UK tax liability, the need to register is triggered.
Deadlines for registration and updating information held on the TRS
- Registrable taxable trusts
The TRS is the mechanism for registering a trust for self-assessment. Therefore trustees who need to register a trust for self-assessment and also wish to avoid penalties under TMA1970 must, in practice, register via the TRS by 5 October following the end of the tax year.
- Registrable express trusts
Non taxable trusts in existence on or after 6 October 2020 deadline to be registered is 1 September 2022. A trust which becomes registerable in the 90 days immediately prior to 1 September 2022 must register within 90 days of the date of creation. Non taxable trusts created after 1 September 2022 must be registered within 90 days.
What are your duties after you have registered the trust ?
You have to keep the details on the TRS up to date. Changes to the trust details or beneficial ownership must be registered within 90 days of the date that the trustees become aware of these changes.
If the trust is taxable, you must declare the register is up to date on an annual basis by 31 January. This means you will have to update the register annually via the TRS.
Information required for the registration process
Briefly this includes details of the trust and assets (where it is a taxable trust) and also persons involved with the trust such as Settlor, Trustees, the beneficiaries and anyone with control over the trust e.g. a protector. Details of the beneficiaries can relate to a named individual or a class of beneficiaries.
Penalties if you get it wrong !
On 5 March 2018, HMRC informed the various professional bodies of the details of the penalty regime for late registration with the TRS. The fixed penalties for an administrative offence are:
- Registration made up to three months after the due date: £100 penalty
- Registration made three to six months after the due date: £200 penalty
- Registration more than six months late: either 5% of the total tax liability or £300 penalty, whichever is the greater sum.
The due date for trustees to complete, or update, the trust’s details with the TRS will normally be the 31 January following any tax year in which the trust has paid specified UK taxes on income or assets.
Next steps – ahead of the deadline of 1st September 2022 for registrable trusts
We can advise if the trust comes under the 5 MLD obligations and carry out a review of the trust for the Trustees We can help Trustees and Personal Representatives who have to register an estate to understand their obligations under these rules and assist with the UK Trust registration process if required. Please contact Claire Redding TEP, on 0208 6695145 if you would like assistance.
Disclaimer: this article is intended as an introductory guide only and information contained therein may be subject to change from time to time. The contents of this article should not be viewed as specific advice for a specific individual or circumstance. Carpenter and Co do not accept responsibility for any loss occasioned by someone acting or refraining from acting on the basis of the opinions expressed in this article.
Read MoreContested Probate
Are you seeking to contest an estate or dispute a Will?
If you are in disagreement about the distribution of a deceased person’s estate or know someone who is then this article is for you.
These disputes involve inheritance and challenging the validity of a Will.
Ask yourself the following:
- Are you concerned that the testator/testatrix (the person making the Will) did not possess the requisite mental capacity to make a Will?
- Are you concerned that the Will is a forgery?
- Are you concerned that the testator/testatrix was influenced to distribute their estate in a certain way as to benefit certain individuals over others?
- Did the testator/testatrix even realise they were making a Will?
- Was the testator/testatrix aware of the contents of the Will which they signed?
- Has the Will left you what you reasonably expected and deserved or were promised?
- Do you have concerns with regard to the circumstance or way in which the Will was made?
You may challenge a Will where either the Will has not been executed correctly in accordance with the law or where you believe there was undue influence on the testator/testatrix at the time they made the Will and/or the testator/testatrix lacked sufficient mental capacity at the time of making the Will.
If you believe the Will has been validly executed and undue influence and lack of mental capacity do not come into play then you may still be entitled to contest an estate under the Inheritance (Provision for Family and Dependants) Act 1975 if you believe that the Will did not make reasonable financial provision for you. The 1975 Act sets out who is permitted to make a claim. Please be aware that a claim under the 1975 Act must be made within 6 months of the grant of representation therefore it is crucial that you act fast if you believe you have a potential claim.
Section 1 (1) sets out the various categories of people who are able to make a claim under the 1975 Act:
Where after the commencement of this Act a person dies domiciled in England and Wales and is survived by any of the following persons:—
(a) the spouse or civil partner of the deceased;
(b) a former spouse or former civil partner of the deceased, but not one who has formed a subsequent marriage or civil partnership;
(c) a child of the deceased;
(d) any person (not being a child of the deceased) who in relation to any marriage or civil partnership to which the deceased was at any time a party, or otherwise in relation to any family in which the deceased at any time stood in the role of a parent, was treated by the deceased as a child of the family;
(e) any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased;
You must fall into one of the above categories in order to make a claim under the 1975 Act.
The next stage you must consider is whether you have reasonable grounds to make a claim.
The points to consider here are as follows:
- The Will does not reflect the deceased’s wishes and therefore there is a mistake of fact (e.g. by the solicitor drafting the Will)
- The deceased lacked mental capacity and did not fully understand the meaning and defect of what was in the Will
- The deceased was unduly influenced when making the Will
- The deceased failed to execute the Will correctly
- You feel that you were unfairly treated and not sufficiently provided for or disinherited entirely from the estate and you were maintained by the deceased
If any one of these grounds apply to your situation then you may be able to contest the estate under the 1975 Act.
Our Private Client Team are here to help
Our team have a wealth of experience in dealing with such matters and a sensitive and tailored approach to each client’s needs.
If you are concerned about the validity of a Will and believe you may have a claim or are seeking to contest the distribution of an estate please call us on 020 8669 5145 or email us on mail@carpenterssolicitors.co.uk
Read More
The Risks of not Having a Lasting Power of Attorney
If you are unsure of how your financial affairs will be managed during your lifetime and who would make decisions about your care if you cannot make decisions for yourself, please read on.
During your lifetime there may come a time when you are unable to deal with your day to day financial affairs and care. When that time comes, if you have Lasting Powers of Attorney (LPAs) in place for both Property and Financial Affairs and Health and Welfare, your Attorney(s) can begin to deal with these vitally important matters for you.
An LPA for Property and Financial Affairs can be used by your Attorney(s) if you have lost mental capacity, as well as with your consent whilst you have mental capacity, for example if you were in hospital for a long period of time and could not physically get to the bank. On the other hand, an LPA for Health and Welfare can only be used if you have lost mental capacity.
If you do not have LPAs this means there is no one appointed to deal with your affairs or your care. Even your Next of Kin does not have the authority to deal with your financial affairs or make decisions about your care, even if you are married. This has recently been highlighted by the heartbreaking situation Kate Garraway unfortunately found herself in when she tried to deal with her husband’s affairs and care.
If this happens, your family members or close friends could apply to the Court of Protection for a Deputyship Order. This process is very lengthy and much more costly than making an LPA, as there are Court fees, maintenance fees and usually Solicitors fees involved. If there are no family members or close friends who wish to or are able to apply or the application is refused, then your affairs may be dealt with by the Local Authority.
Not having an LPA means that you do not get to choose who you would want to deal with your affairs and you have no control on what decisions are allowed to be made. Who would you want to deal with your money and property? Who would you want to make the decision about where you live? Who would you want to make the decision about hospital treatment?
Having an LPA gives you the choice on who you want to appoint as your Attorney(s), what decisions you wish for them to make and ensuring your wishes on how you would want your financial affairs and care to be dealt with if you could no longer make decisions for yourself.
If you lose mental capacity then unfortunately you cannot make an LPA, it will be too late. An LPA is there just in case and will give you peace of mind that your affairs and care will be dealt with by who you want and how you want. To avoid difficulties for you and your family later on, prepare for the future and ensure your needs and wishes will be met.
For further general information about LPAs click here: https://www.carpenterssolicitors.co.uk/services/lasting-powers-of-attorney
If you wish to discuss this further or instruct us to prepare LPAs for you, please do not hesitate to contact the Private Client team by email at LPAs@carpenterssolicitors.co.uk or by telephone on 020 8669 5145.
Read MoreStatement on COVID-19
In light of rising concerns surrounding the coronavirus (COVID-19), we want to assure you that Carpenter & Co is committed to maintaining business operations as usual. Our number one priority is the health and wellbeing of our clients and staff. With this in mind, we wanted to let you know what we are doing to keep everyone as safe as possible during this time.
We are not accepting “walk-ins” and we are not arranging face-to-face meetings. We have however the technology to have meetings via telephone conferencing and video calls.
What else are we doing?
- Our lawyers and staff are working from home wherever possible. Our operating model supports remote working. We are confident that clients will continue to be well served with limited disruption and delay;
- We are using digital technologies that support an enhanced connected experience;
- Our offices are no longer open to the public;
- No face-to-face meetings will take place at our offices;
- Regular updates for staff on government and company guidelines;
- Admin staff come in to the office as much as necessary to check the post and support our lawyers so they carry on working from home; and
- We are communicating regularly with staff as their welfare is our primary concern.
We are also able to advise clients in respect of the legal challenges they face due to COVID-19. So if you do need help, please give us a call on 020 8669 5145 or drop us an email at covid-19@carpenterssolicitors.co.uk.
Some of our clients have also used this opportunity to attend to legal matters that have been hanging over their heads, such as finalising their Wills, LPA’s, estate planning, cohabitation agreements, etc. If you need any assistance on any of the above, please do not hesitate to contact Luiza Lobo or Taynia Pemberton in our Private Client Team.
Our primary focus is to support our staff and to continue delivering the needs of our clients. We will continue to update you on developments at the earliest and most appropriate opportunity, and we would ask that you work with us during this time.
We are conscious that you are likely to be receiving a high volume of communications about COVID-19, but we hope the above provides you with the re-assurance that we can continue to partner together uninterrupted during this challenging time. If you have any further questions, please email Sue McCormack who will respond to you as soon as possible.
Sincerely,
Paul Verlander
Senior Partner
Carpenter & Co
Simon McIlwaine appointed Legal Advisor to the South African Legion
Our partner, Simon McIlwaine, has been appointed as Honorary Legal Advisor to the Legion in the United Kingdom, where he will be assisting with developing the organisation’s charitable structure.
Around 227,000 South Africans reside in the United Kingdom, probably one quarter of whom have undertaken national military service in the armed forces or the South African Police.
The South African Legion United Kingdom & Europe is an ex-servicemen’s association comprised of South African Military Veterans who have either served in South Africa’s security forces or in the British Armed Forces and who now reside in the United Kingdom and Europe.
South African forces fought with distinction in both World Wars, the Korean War and in the war to protect South Africa’s borders. They have a long and proud record of service, and an active programme of remembrance and social events in the United Kingdom.
Carpenter and Co are signatories to the Armed Forces Covenant and are proud to support British and Commonwealth veterans.
Read MoreCarpenter & Co raises £480 in St. Raphael’s Hospice’s “Make your Will Fortnight”
We have participated once again in the St. Raphael’s Hospice “Make your Will Fortnight”. Under the terms of this scheme, for a period of two weeks, our Wills & Probate team prepared wills free of charge for a number of local people who each made a donation to the hospice.
We have been pleased to support a local charity and the sum raised this year was £480.
Carpenters have supported this scheme previously and we hope to take part in the Make your Will Fortnight again next year.
Free seminar for first-time home buyers
If you’re a first-time buyer, this event is for you.
A panel of friendly experts (including our own Rebecca Mabert) will give presentations. They also will be glad to answer all of your questions about getting on the property ladder – there is no such thing as a silly question.
- Place: The Ginger Frog, 53 Woodcote Road, Wallington SM6 0PH
- Time: Thursday 4th April, from 6:30pm to 8:30pm
- Booking: If you’d like to attend, email reserve@ftb-uk.com for your free e-ticket.
But hurry! There are only 50 seats available.
See the image below for further details.
Residential Conveyancing
Residential conveyancing is the legal process of purchasing or selling a house. Residential conveyancing can involve buying/selling Leasehold and Freehold properties or Shared Ownership.
Residential conveyancing plays a huge part it people’s lives. Whether it is buying your first home or selling and moving to a new one. It is most people’s dream to one day own their own home and there are options and ways to assist them in achieving their goals and getting onto the property ladder, such as a reduction in Stamp duty payable for first time buyers up to £300,000 or Help to Buy Schemes brought in by the government.
At Carpenter & Co we have an experienced team of Property Solicitors and Licensed Conveyancers. Our aim is to take away some of the stress and make your transaction as easy as we can for you, and to give you an efficient service for all your property needs.
Once we are instructed we aim to make things as simple as possible for you.
We also provide you with an easy to read written process of how a sale and purchase transaction works.
To help you manage the costs of conveyancing, we will provide you with a full written quotation at the start of the transaction. This quote will include a comprehensive breakdown of the costs and expenses you can expect to incur with no hidden costs.
We are happy to provide an oral and written quotation upon request – please contact Paul Verlander at paulv@carpenterssolicitors.co.uk or telephone us on 020 8669 5145.
Read MoreCharity Summer BBQ
For anyone who doesn’t have plans for Friday evening, please note that the Mayor of Sutton is holding a summer barbecue at 7:30pm at the Woodcote Flying Club.
- Tickets are £12.
- Live music with Dan Davison.
- Proceeds to be given to Homestart Sutton and The Kidney Fund.
Details are shown below:
Sounds like a fun event for a good cause.
Read More