Trust Registration Service Deadline and Penalties

Following on from the deferral of penalties for late self-assessment returns, a number of members have expressed concern about the position for updating the Trust Registration Service (TRS).

Taxable trusts should have updated their records on the register by 31 January 2021 but this has proved challenging for a number of reasons, not least the new requirement for trustees to complete a digital handshake with their agent to authorise them to act.

Although HMRC have not provided a formal extension to the TRS deadline, HMRC have confirmed again on the Agent Forum this week (thread reference TRS-9417 for those who have access) that, as with the self-assessment regime they will not automatically charge penalties for failures to meet this deadline, understanding that COVID pressures may make it difficult for trustees to meet this deadline.

HMRC released the following statement to ATT/CIOT and other professional bodies last year which members may also find helpful:

“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.” [our emphasis]

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.”

Further guidance on updating the Trust Register can be found at on the ATT website.


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