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Trustee Registration Service

Background

This has arisen from The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017 No. 692).

There are two principal elements to the requirements, as relevant to trustees of given categories of trust:

  • For the trustees of a ‘relevant trust’ to maintain records of prescribed details relating to the trust.
  • For the Commissioners for HM Revenue & Customs to maintain records of prescribed details relating to the trust.

The second element, above, is to be conducted via the Trust Registration Service (TRS).

An interpretation of these Regulations is that all ‘express trusts’, being those which were created deliberately by a settlor through a transfer of property to a trustee for a given purpose, should register with HMRC’s Trusts Registration Service for any period in which such a trust becomes liable to any of income tax, capital gains tax, inheritance tax, land and buildings transaction tax and stamp duty reserve tax.

This is a complex piece of legislation being debated at length within the self-administered pensions industry. As the Scheme Administrator we are working hard to get the facts together to help assist our clients. Below are some of the basic points and problems that have come to light so far.

By what date does a trust need to be registered with the TRS? HMRC’s guidance note refers to various dates, which now extends the 5 January 2018 deadline to 5 March 2018.

Where do we register?

The registration service is available here.

Do SIPPs established under trust need to register with the TRS?

Yes. Although HMRC’s guidance document includes a section on occupational pension schemes, this does not mean that trust-based personal pension schemes are exempt from the requirement. The fact of being established under trust, rather than the distinction of occupational or personal pension scheme, is the relevant factor.

We understand that a SIPP would be registered as a ‘Trust established by settlor’, within the TRS.

Whose details need to be recorded on the TRS?

The TRS requires details of the ‘beneficial owners’ and the ‘potential beneficiaries’ of taxable relevant trusts.

Beneficial owner is defined as:

(a) The settlor;

(b) The trustees;

(c) The beneficiaries

(d) Where the individuals (or some of the individuals) benefiting from the trust have not been determined, the class of persons in whose main interest the trust is set up, or operates;

(e) Any individual who has control over the trust.

This could cause problems for SSAS since is it necessary to provide details of all beneficiaries on the expression of wish? This could also mean it is necessary to provide full sponsoring employer history from the original through to any other participating employers.

It was also suggested that all of the membership of a SIPP established by trust would need to be considered for TRS purposes, even if only one member’s individual SIPP gave rise to a tax liability for which TRS registration was needed. The industry has asked HMRC to reflect on this perception, in the context of a typical arrangement wherein a SIPP member becomes a trustee to the extent of his or her own SIPP only, under an effective ‘sub-trust’ arrangement.

Further clarification is being sought on these issues.

Is it necessary for a trust to be registered where its only tax liability is Stamp Duty Reserve Tax, arising through some other structure such as a collective investment scheme?

Yes. Although the Stamp Duty Reserve Tax (SDRT) might be ‘invisible’ to the trust through being settled within the investment scheme, the fact that the trustees are ultimately paying the tax means that the fact of its arising incurs responsibility for registering with the TRS.

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