Update 29 November 2021: The article has been updated with a statement from HMRC on non-taxable trusts which were in existence at 6 October 2020 and thus which should be registered, but which closed or ceased before 1 September 2021 when it first became possible to register them.
Last updated 29 November 2021
New functionality allowing trustees and agents to update the Trust Register via the Trust Registration Service (TRS) was released in April 2020. The register has subsequently been updated on 4 May 2021 to allow taxable trusts to upgrade their registration to be compliant with the requirements of 5MLD following amended legislation introduced on 6 October 2020. The register opened for the registeration of non-taxable trusts on 1 September 2021. The following is a summary of the various practical, administrative issues reported to us by members, together with any solutions or suggestions that we think will be helpful based on members’ feedback and experiences and further information from HMRC. This note is not intended to cover the detailed legislative requirements of the TRS or changes to the requirements as a result of 5MLD.
While we have attempted to check everything below, HMRC’s processes can change at short notice. Accordingly, we can’t guarantee everything as accurate but it does represent the best of our knowledge as at publication date. We will continue to update this page as we learn more. If you spot that anything has changed, is incorrect or you have suggestions you think it would be helpful to share with other members, please atttechnical [at] att.org.uk (subject: TRS%20How%20To%20Guide%20) (let us know).
Members can find guidance from HMRC on GOV.UK including:
- The Trust Registration Service Manual (first published 17 May 2021 and updated 1 September 2021 - the next update is due December 2021.)
- Manage your trust’s details
- Register your trust as an agent
- Trust and Estates newsletter
Recent news items from the ATT include:
- 29 November 2021 - confirmation of HMRC's position on non-taxable trusts in existence at 6 October 2020 - these need to be registered even if closed before September 2021.
- 2 September 2021 - confirmation of extended deadlines and changes to excluded trusts under 5MLD
- 1 September 2021 confirming the opening of the TRS for non-taxable trust registrations and the new extended deadlines
- 29 July 2021 - Registering a non-taxable trust with HMRC
- 12 July 2021 - Trust Registration Service – Non-Registrable Trusts – Exclusion for certain Insurance policies with a surrender value
- Appointing an agent to update the register
- Step by Step Guide to Appointing Agent to Update the Register
- Digitally excluded trustees
- Initial registration of the Trust
- General system support
- Trusts which have closed or ceased
- When to update the register
- Send us feedback
Although the agent may have completed the initial registration for a trust, this does not give them authorisation to complete subsequent updates to the register. A further authorisation process is required which needs the trustees to set up a Government Gateway account for their trust. HMRC guidance on how trustees should authorise their agents to complete updates is available on GOV.UK.
There are various steps indicated in HMRC’s guidance to complete client authorisation and, based on member feedback, the following comments and observations might help members and their trustees to navigate the process.
Trust credentials are separate from trustees’ personal credentials
Any trustee who already has a Personal Tax Account in their own name needs to be aware that the trust’s credentials are completely separate to their own. The trust needs to set up its own Government Gateway which needs to be an account for an organisation.
Self-assessment online and the Trust Register are not linked
Another common assumption is that the Trust Register is linked to Self-assessment. It isn’t. Logging into the trust’s Business Tax Account using the trust’s credentials will not give access to the TRS.
Enter credentials in the right place
Once the trustee has set up their Government Gateway credentials for the trust they need to appreciate that where they take you in HMRC’s systems depends on which page of GOV.UK precedes the sign in page. Clicking various green buttons within HMRC like Start now, Register now etc. all generally take the user to what looks like a common sign in screen. However, while the sign in screen looks the same, where the user ends up after entering their credentials is dependent on which page they started from on GOV.UK pages.
For agents, the simplest way to access the TRS is to use the links which are within their Agent Services Account (ASA) under the heading ‘Trusts and Estates’.
Step 1: The Trustee sets up Government Gateway account
The trustee needs Government Gateway credentials for each trust they administer in order to appoint an agent to update the Trust Register in respect of that particular trust. If they have already got credentials for the trust, they can go straight to step 2.
To set up a Government Gateway user ID for the trust
- The trustee should go to https://www.gov.uk/guidance/manage-your-trusts-registration-service and click on the green ‘Start now’ button at the bottom of the page.
- This will take the trustee to a page headed 'Sign in using Government Gateway'. The trustee should click on the link to 'Create sign in details' which is under the green button to sign in.
- The trustee will be asked to enter their email. HMRC will then send a confirmation code to verify the individual has access to the account.
- After entering the confirmation code, the trustee will be asked to supply their name and set up a password and recovery word. They will then be issued with a Government Gateway user ID.
- Once the User ID has been created the trustee will be asked for the type of account they need. The correct account to select for a trust is Organisation.
For digitally excluded trustees who can’t set up a Government Gateway, please see comments below.
Step 2: The trustee needs to claim the trust
In order to ‘claim’ the trust, the trustee should either continue the process above or, if they have had to log out for any reason, go back to Manage Your Trust's Details page and follow the Start now green button at the bottom of the page and use the credentials created in step 1.
The trustee will need:
- The Trust’s UTR
- Details of the trust’s original registration.
The trustee will be asked to provide details that HMRC already knows about the trust from the original registration (or the latest update) in order to ‘claim’ it. This could be the name, date of birth and NINO of the lead trustee or another person associated with the trust – which could be one of the trustees, beneficiaries or settlors. It may therefore be helpful to provide the trustee with a copy of the initial registration where this has been done by the agent. The trustee can check the details entered and will be told if they have successfully claimed the trust.
If the trustee does not enter the correct details they will get a message that their answers do not match the details HMRC holds about the trust. Trustees will have three attempts to enter the correct information. If they are unsuccessful after the third attempt they will be locked out and will have to repeat the process after 30 minutes.
We have had reports that problems can arise where, on original registration, details of (say) a beneficiary’s passport number was provided rather than a NINO. We are looking into whether this is causing problems that might prevent a trustee claiming the trust.
Step 3 The agent signs into their Agent Services Account
Once the trustee tells the agent they have set up a Government Gateway account for the trust, the agent can sign in to their Agent Services Account (ASA). Under the ‘Trusts and Estates’ section there should be a link to ‘Ask your client to authorise you’.
We assume that all agents have now set up their ASA–and certainly any agent who has already registered a trust will have created an ASA as part of that process and should continue to use those credentials – but if any agent has yet to create their ASA they can follow the steps on GOV.UK.
Step 4: The agent issues a link to the client
The agent will need to enter the trust’s UTR and confirm the client details in order for the system to generate a link which the agent must copy and email to the client.
Agents are able to track their recent authorisation requests in their ASA.
Step 5: The trustee authorises the agent
The trustee needs to click on the link sent by the agent. This will take them to an appointment message from where they can sign in to their Government Gateway account using the credentials that they created in Step 1. The trustee will then be presented with the option to authorise their agent and to give their consent to HMRC allowing the agent to maintain the trust. The client will be presented with a message that the approval has been completed, and which explains what they can do next.
The link will expire after 21 days and have to be reissued if the trustee does not act in this period.
Step 5: Agent logs in to update the register
Once the trust has accepted the agent’s appointment, the agent can either log into their ASA and select the relevant option from the drop down menu under the 'Trusts and estates' heading, or go to https://www.gov.uk/guidance/manage-your-trusts-registration-service and log in with their ASA credentials.
UPDATE MAY 2021: We understand that for trusts registered before 4 May 2021, the first time that the agent logs into the trust to update it, they will be asked to confirm if they are maintaining an express trust (note 1). The next screen will then ask for confirmation that the trust is still taxable (note 2). The trustee will then be presented with a screen saying that the declaration has been received. In order to carry out any updates to the data held for these trusts, the agent needs to log out at this point and then log back in again. HMRC have advised us that they are working on clarifying the messages here as it has resulted in some confusion.
Note 1 - An express trust is one deliberately created by a settlor, rather than arising as a matter of law. It matters whether the trust is an express trust or not as only express trusts are within the scope of the regulations governing the Trust Registration Service. A non-express trust may need to use the register to obtain a UTR, but is not otherwise subject to the regulations.
Note 2 - Where a trust was originally registered as a taxable trust but is now non-taxable, there is not currently a way of saying that it is no longer taxable at this point. We understand this may be changed in future updates of the service.
Once the register has been updated, the whole updated register can be saved as a PDF, including a declaration to confirm the register has been updated.
Many members have raised concerns about what happens if the taxpayer is unable to complete the steps above because they are digitally excluded. A digitally excluded trustee is one who, for reasons of age, disability, remoteness of location, religion or other valid reason is unable to engage with HMRC’s online digital services.
If the lead trustee is digitally excluded, then HMRC have confirmed to us that one of the other trustees can set up the necessary Government Gateway on their behalf. If all of the trustees are unable to appoint their agent digitally, the lead trustee should call the Trust Helpline (0300 123 1072) for help and support.
If the advisers on the helpline are unable to assist, they may be able to pass the trustee onto HMRC’s Extra Support team for further support. The Extra Support team will determine if the trustee falls into the digitally ‘assisted’ group (i.e. they could use the service with help) or truly digitally excluded (they have no ability to authorise an agent digitally).
If members are experiencing problems getting help from the helpline for their digitally excluded trustees please let us know.
The details of the agent authorisation process above relate to updating a record for a trust which is already on the register. This process does not need to be followed when the agent is completing the initial registration of the trust as agent authorisation via the digital handshake is only required to view or amend details already held in the register.
Agents can register trusts by following the relevant link under the ‘Trust and Estates’ heading within their Agent Services Account.
Trustees or agents who experience problems with the TRS can either call the Trusts Helpline (0300 123 1072), or raise a ticket with the digital team by clicking on the Get help with this page link at the bottom right of the screen.
The user should then provide a UTR and some more detailed information to identify the case and reason for the problem. It is helpful if the trustee/agent can:
- Explain what they were trying to do before they got the error message
- Idenitify what step in the progress they had reached before the error arose
- Provide screen shots showing what was entered into the system and any messages on screen
- Provide the date and time of the incident.
It was reported to us in 2020 that HMRC were looking into some issues affecting the ability to update the register for a small number of cases which were registered at the start of TRS. HMRC reported at the time that they were working on identifying the particular cases and fixing the problem so we assume that this has now been resolved but if there are ongoing issues affecting you or your clients please let us know.
Following the creation of the Trust Register, trustees should report the closure of trusts via the TRS in addition to reporting via self-assessment/other routes as applicable. Only trusts which are outside the scope of 4MLD/5MLD (for example, non-express trusts) which have registered on the TRS for the sole reason that they needed a UTR are outside the requirement to report their closure via the TRS - although HMRC would prefer that the trustees of these trusts updated the TRS as well for completeness. In practice, trustees of such trusts may prefer to do this voluntarily, to ensure data is removed from the register after the appropriate timelimits have passed.
A number of members have raised concerns about whether or not it is necessary to register non-taxable trusts which were brought in scope of the register from 6 October 2020, but which closed before the TRS was opened up to allow non-taxable trusts to register on 1 September 2021. This has been queried in a number of forums, and HMRC's latest response (23/9/21) is that "The requirements for non-taxable express trusts to register on TRS came into force as an amendment to the Money Laundering Regulations on 6 October 2020. All trusts that meet the requirements to register from that point are required to register by Summer 2022. Any trust that is registerable from 6 October 2020 onwards is, strictly speaking, required to register, regardless of whether it will still be in existence by Summer 2022."
We raised concerns with HMRC that this is a somewhat unhelpful requirement, given that there will be (obviously) no assets left in the trusts to meet the costs, and trustees will have assumed their duties were complete. On 29 November we received a further statement from HMRC confirming their original position:
“On 6 October 2020, amendments to the Money Laundering Regulations came into force to require trusts without tax liabilities to be registered on the Trust Registration Service (TRS). Any trust that was within the scope of registration on or after 6 October 2020 is required to register by 1 September 2022. The IT changes required to enable trustees to register such trusts in practice were completed on 1 September 2021. Trusts that were in existence on or after 6 October 2020, and have since ceased, are still liable for registration on TRS. Trustees of such trusts should register them on TRS and them immediately close the trust record. We appreciate that it may be challenging to raise sufficient awareness of this requirement with former trustees and agents of trusts that no longer exist, however we have an obligation to produce and maintain a comprehensive register of trusts in the UK from 6 October 2020 onwards. HMRC will take a proportionate approach should any such trust come to our attention after the deadline for registration of 1 September 2022.”
A similar issue arose for taxable trusts which registered in 2017, but closed prior to the introduction of the facility to update the TRS in April 2020. On 20 November 2020, HMRC confirmed to us that where a registered, taxable trust ceased prior to 28 August 2020 then, while they would prefer that trustees (or their agent) updated the TRS to report the closure of the trust, they would accept a report that the trust had closed by letter or via self-assessment. This was very welcome, as it avoided many trustees having to complete the digital handshake simply to report information about the closure that HMRC already had. Unfortunately the same will not apply for non-taxable trusts still in existance at 6 October 2020.
Although this note is intended to focus on the practicalities of updating the register, we will touch briefly on the technical question of when a trust needs to update its entry in the register. This is more complex following the introduction of the 5MLD into UK law on 6 October 2020 and we are currently discussing a number of aspects with HMRC.
From 1 September 2021, the register is open for registrations of both taxable and non-taxable trusts.
Updating the register for taxable trusts
Under the original 4MLD regulations, trustees were required to update the data required under those regulations by 31 January following the tax year in which the change occurred - provided that there was also a tax liability in the tax year the change occurred.
If there was no tax liability, the requirement to update was deferred until the 31 January following the next tax year in which a relevant tax liability arose. (Note that tax liability is not limited to just income tax or CGT as might be suggested by the link to tax years, and includes SDLT/LBTT/LTT, IHT and Stamp Duty Reserve Tax.)
Where there were no changes to trust data in a tax year, but the trust had incurred a tax liability during the period, the trustees were required to confirm via the TRS that no changes had occurred and that the details on the register are up to date on or before 31 January following the tax year.
Under 5MLD, trustees of taxable trusts are firstly required to provide additional information about the trust including the following:
- Details of the country of residence, nationality, and nature and extent of the individual’s beneficial interest for each of the named beneficial owners (broadly the settlor, trustees, and beneficiaries). (This information is not required where a beneficiary has been identified by class)
- Details of any controlling holdings of non-EEA entities.
We are currently waiting for amendments to the regulations which will mean that trustees of taxable trusts who become liable to tax before 2 June 2022, will be given until 1 September 2022 to provide this information. After that, newly taxable trusts must provide any extra details within 90 days of becoming taxable.
Our understanding of the regulations is that trustees must continue to update the register for changes to data required under the original 4MLD regulations by the 31 January deadlines as set out above. This becomes in effect ‘standing data’ which requires annual review.
However, the additional information on beneficial owners residency, nationality etc and controlling interests required under 5MLD must, once it has been provided to HMRC, be updated within 90 days of the trustees becoming aware of a change. There had been some confusion over this point, with the suggestion that the 90 day requirement only applied from 2022, but a further review of the legisation and discussions with HMRC have confirmed that it applies once the information has been supplied. HMRC have agreed to update their guidance to reflect this point. (Note - the current legislation states that trustees only have 30 days to update information on the register but HMRC have confirmed that they will be introducing an amendment to the regulations to extend this period to 90 days. We are seeking clarification on whether or not trustees will be required to comply with the shorter, 30-day requirements until that change takes effect or if, in practice, HMRC would be prepared to allow the longer period prior to it becoming law.)
Updating the register and 2019/20 self-assessment
As the deadline for 2019/20 trust returns this has now passed, this text is for reference only.
For a trust incurring a tax liability in 2019/20, the position is straightforward - the trustees must either update the register, or confirm that there have been no changes to the data previously submitted, by 31 January 2021.
For trusts where the details changed in either 2017/18 or 2018/19 the position is more complex.
If the trust did not incur a UK tax liability in the same year as the change, then an obligation to report has not yet arisen. If they did incur a tax liability in the year of change, then the reporting deadline would have been 31 January 2019 or 31 January 2020 depending on the year of liability. However, since it was not possible to report changes at those points, trustees did not have to take any action.
It is our understanding that, if an obligation to report changes arose in 2017/18 or 2018/19 with either a 31 January 2019 or 2020 deadline, trustee should now take steps to update the register by 31 January 2021 – regardless of the liability position for 2019/20. In other words, if there was a change before 6 April 2020, and a liability for any of the three years 2017/18 to 2019/20, details must be updated by 31 January 2021.
Question 20 and 2019/20 Tax returns
Trusts within self-assessment are asked to confirm that they have either updated the register or confirmed the details are correct by completing question 20 of the SA900 return. For 2017/18 and 2018/19, trusts were able to leave this blank because the functionality to update the register did not exist, but for 2019/20 returns HMRC are asking trustees to address this question.
Order of filing self-assessment and TRS
It is not clear that the 4MLD regulations themselves impose any obligation to report an update via self-assessment. A number of members have queried whether it is strictly necessary to update the TRS before filing the trust self-assessment return in order to answer question 20 with a 'yes'. We have also been asked whether, if the self-assessment return is originally filed with question 20 left blank and the TRS is updated subsequently (and before 31 January 2021), the return should then be amended to update question 20.
HMRC released the following statement to ATT and other professional bodies on 9 December 2020:
“HMRC recognises that this is the first year in which trustees have been able to meet their obligations to keep the trust register updated. As explained in the August 2020 Trusts and Estates Newsletter, trustees and agents should ensure that box 20.1 on the SA900 return reflects whether the register has been updated or if a ‘no change’ declaration has been made at the time the return is submitted. However, HMRC will not automatically charge penalties if the box has not been ticked and the register was not updated before the 31 January deadline. Instead HMRC will take a pragmatic approach to charging penalties, particularly where it is clear that trustees or agents have made every effort to meet their obligations.
“Trustees and agents do not need to submit an amended return if they have updated the register, or made a ‘no change’ declaration, after the original return was submitted and the only change to the information on the original return is a tick in box 20.1.”
This statement is welcome because it effectively lifts the requirement to update the TRS before the trust’s tax return is completed. It also confirms that trustees and their agents do not need to amend any self-assessment returns which have already been filed purely to answer question 20 if they have left it blank. Question 20 should be answered honestly at the time of submission.
We had received some requests from members to extend the 31 January 2021 deadline for updating the TRS because of additional covid-related work pressures and problems getting clients through the digital handshake. While HMRC are unable to extend the deadline, the statement about penalties above looks helpful for agents under pressure at this time.
The ATT queried with HMRC what a ‘pragmatic approach’ might look like in practice and HMRC responded as follows:
“It is difficult to comment further on this because the approach taken will depend on the facts and particular circumstances of each case, which will be different in each situation, and hence we cannot provide specific details. However, HMRC would not seek to charge a penalty in situations where it is clear that the agent/trustee made every reasonable effort to comply with the requirements.”
Thank you again to all who have been in touch about this matter – we very grateful to members who have spent significant time gathering screenshots and details of the process and sharing that with us. As ever, any further feedback from members is very welcome to atttechnical [at] att.org.uk.
We are very grateful to HMRC for the help and support they provided in the production of the original version of this note.