In order for the UK to be compliant with the Fifth Money Laundering Directive, legislation was introduced on 6 October 2020 regarding the required registration of trusts.
Formerly only trusts with a resultant tax liability needed to register under the existing Trust Registration Service but now even non taxable express trusts must register and the reporting requirements in relation to previously registered trusts have been expanded to comply with the new legislation.
There are some exclusions such as:
- trusts for UK registered pension schemes
- co-ownership trusts set up to hold shares of property owned jointly by two or more people for themselves as tenants in common
- trusts for bereaved children under 18 or adults aged 18-25 set up under the Will of a deceased parent or criminal injuries compensation scheme
- financial or commercial trusts created in the course of professional services or business transactions for holding client money or other assets
- trusts set up to open bank accounts for minors
- some charitable trusts registered as a charity in the UK
In addition, for taxable trusts registered before 4 May 2021, there is now a need to update the trust details to comply with the new regulations.
Information on the following categories need to be kept up to date and any changes must be completed within 90 days, these include changes to the lead trustee details, other trustee changes, changes to beneficiaries etc.
Taxable trusts must annually declare the trust is up to date.
The above regulations must be complied with by 1 September 2022 for all existing trusts.
For any new trusts the requirements must be met within 90 days of creation of the trust.
The above undoubtedly is more legislation to comply with in relation to trusts and accordingly Bromhead will shortly be contacting clients we believe to be affected by the regulations, but if you are a trustee of a trust, it is important that you are aware of your obligations and ensure those are met.