Update on how the HMRC will start to look upon trusts and what actions to take.

Trusts are used to pass on the assets to a chosen beneficiary or for a bequeath from a will or other estate planning tools. They are opened by a variety of different people, but are generally used to pass on an inheritance.
The government have changed the rules about how trusts are administered. They are concerned that money launders are using the UK trust system to avoid the assessment of tax or are hiding assets that were earned illegally.

To help solve the dual problem of tax avoidance and money laundering, the Chancellor of the exchequer has decided to expand the remit of the Trust registration service to include more types of trusts.

The trust registration service is when trusts are recorded with the HMRC, so they can assess whether there’s a risk of them being used to circumnavigate the rules and regulations. This means that if you hold assets with a trust policy, it may be necessary for you to register the trust with the HMRC.

A trust can be registered with the HMRC either by yourself or by somebody acting on your behalf. You can find more detailed information and log a trust directly on the HMRC website.

The registration of the trust does not cost anything, although some companies are charging an administrative fee to cover the cost of processing and analysing the trust information. Any trusts that need to be registered, must be registered by 1st September 2022.

If you hold money within a trust or think that you may be affected by these new rules, please contact us straight away, as we’ll be able to assist you in your endeavours.

Get in touch for further guidance.