Trust Wills and Trust Registration
The UK Trust Register was introduced in June 2017 and at that time trusts were only required to be registered where there was a UK tax liability. In October 2020 new legislation was introduced making it mandatory for trusts to be registered regardless of whether they have a UK tax liability. Trustees of all new and existing trusts must understand the new legislation and assess whether their trust falls within the registration requirements. The responsibility to register a Trust falls to the Trustees. Trustees or their agents such as solicitors or accountants can register a trust using the UK “Government Gateway” facility after setting up a Government Gateway online. Once registered, the Trustees have an obligation to update the portal within 30 days of them becoming aware of any changes to the information previously reported. If Trustees do not comply with the legislation, they can be liable to receive significant financial penalties and sanctions.
Trust Wills and Trust Registration
A Will Trust is a trust that is incorporated into your Will when it is prepared for you. The trust comes into operation on your death. There are various types of Trust Will which are designed to give you flexibility over your property and assets and how they are dealt with after you have died. Different trusts are used for different purposes. Some of the most common types of Trusts used in Wills are:
Bare Trust
This type of trust is a basic trust in which the beneficiary has the absolute right to the capital and assets within the trust, as well as the income generated from these assets. This type of trust commonly occurs where a beneficiary in a Will in a minor.
Property Trust
This type of trust allows someone to continue to live in your property for a period, but they will never become the legal owner of the property which means that when that person no longer needs to live in the property, the property will pass to the people you want it to. A common example where this type of trust is used is where you want your property to pass to your children, but you want your spouse to remain in the house until they die, this is useful if you have remarried but want your home to pass to your children from a previous relationship or marriage.
Flexible Life Interest Trust
A life interest trust is like a property trust but in this case a beneficiary can also receive the benefit of any income from the trust such as income from investments or other savings.
Discretionary Trust
This type of trust has several “potential” beneficiaries. Your trustees decide which of the beneficiaries you have named inherit, how much and when. You can provide your trustees with a letter of wishes as guidance as to your wishes as to how the trust would be managed. These types of trust are useful for children who are going through divorce, are in debt or facing bankruptcy. They can also be used to manage monies on behalf of a beneficiary who isn’t able to manage their own money perhaps in the case of a minor child or an adult with learning disabilities.
There are other types of Trusts which are less commonly used in Wills but may only require registration with HMRC. Your legal advisor will be able to confirm whether a trust requires registration.
When should a Will Trust be registered?
If a UK Trust has a tax liability and has not been previously registered, then it must be registered within 90 days of creation or two years of death if a Will Trust. A trust which does not have a UK tax liability should have been registered prior to September 2022. After this date, the trust must be registered within the same deadlines as a Trust with a UK Tax liability.
The information required for registration of the trust relates to the nature of the Trust itself and details of the Settlor, the Trustees, the beneficiaries, and the assets in the Trust. The details required for the Settlor and the Trustees are their full names, addresses and National Insurance numbers. The minimum details required for the beneficiaries are their names and the type of interest they have in the Trust.
How much does it cost to register a Will Trust?
We charge a fixed fee of £600 plus VAT to deal with the registration of a Will Trust.
