If your a trustee of a trust you need to read this

piggy

I am A 78 year Old pensioner and have just found out that Both My Mothers trust and my own will trust need to be registered with the TRS. Both. trusts were setup in 2016. As a result of a European parliaments directive in 2020.[I thought we had left that shambles behind, obviously not] The government introduced a law which required all trustees to register each individual trust with the TRS, yes yet another government quango, designed to relieve people of their money.

In 2022 the TRS gave trustees a deadline to register their trusts.  Trustees who had not completed them by the due date could be fined up to £5000.  I and many others were never notified about this change in the law. It's only now, by chance, that I have found out about it. I believe The government informed solicitors about the new law and when it was going to take effect, knowing that the solicitors would have automatically registered new trusts on behalf of their clients. Trustees, that managed trusts prior to the Registration deadline, would have been unaware of it. Why did the government not advertise this in the media and make trustees aware of the new rules, so that trustees could register their trusts by the due date. The possibility now arises that I and others who were unaware of the new ruling could face a hefty fine.

For trustees thinking of registering their own trusts, I would say think twice, before attempting what to me was a daunting task. Having unravelled the sea of paper work, It was time to put pen to paper and start filling in the forms. I got as far as the 2nd page, by then I was so confused dazed and disorientated I started behaving like a blithering idiot, so I decided to throw in the towel, yes I was in danger of drowning in the sea of bureaucratic !!!!!!,  I was now up to my neck in it. Please be aware that this is no easy task and unless you are a Philadelphia lawyer crossed with a Bletchley Park codebreaker don't try and DIY.

After trying to complete these forms I was so frustrated and consumed by anger, that I was in danger of being charged with attempted murder, as all I wanted to do was get hold of these insane morons, who designed these forms. The urge to find them and perform a lobotomy on them was overwhelming. Yes a lobotomy was the answer, they needed to be reprogrammed, in the hope that they would no longer be a threat to those of us who want to keep our sanity and understand plain English.
 
The cost for registering a simple low value trust can be between £450 to £750 plus whatever the tax authorities fine is. I believe the fine is most unjust for for trustees like myself and others there are mitigating circumstances and the levying of such fines is grossly unfair. The more trustees that complain the more likely it is that the authorities will abate.

Browntoa

And that's why people shouldn't set up trusts unless they fully understand them .

tacpot12

I've just been through this with some friends who are trustees for a family trust. They were so daunted by it that they asked me to help. By studying the Trust Deed I was able to confirm that the trust was of a type that needed to be registered and was able to work with them to assemble all the information needed to register the trust, which ran to six pages of A4.

With that information to hand, it was relatively easy to register the trust, but doing produced more information that the Trustees needed to store (Government Gateway IDs and password plus a registration reference - the trust already had a UTR) and the trust has to submit an annual confirmation statement, and update their details within 90 days if they become liable to pay any any form of tax it previously wasn't paying. 

It's a whole lot of work, but it is doable by the layman IF you are patient. If you expect to register the trust in 10-15 minutes you are in for a rude surprise. Even with all the information on hand, it took nearly an hour.

It's nothing to do with Europe and everything to do with UK money laundering rules. The UK would have introduced these rules regardless of what Europe did because it also helps with tax evasion, and the UK government wants to collect as much tax as it can. 

One of my friends called HMRC to ask whether they would be fined for registering after the deadline and they were reassured that there would not be a fine as the trust wasn't liable to pay any tax for the past couple of years. 
 

piggy

For those of who replied thank you even though the replies are not what I expected. Firstly eskbanker  ironic its meant to be,  but taken in context its true

  Keep_pedalling but your will trust will not require registering until after your death.I not sure this correct if you check on the TRS site this trust as nearly all trusts do need registering.

  Keep_pedalling this has nothing to do with ISAs so I don’t expect you will get too many readers of this which is probable a good thing because most of it appears to be nonsense. The only catergory I could find to put this in was tax saving, it was not meant to go into isa's. As far as the nonsense is concerned, I dont think the fact that you are about to loose a considerable sum of money through no fault of your own is nonsense.

 Browntoa the trust was set up by a solicitor who included my mothers wishes into the trust, so it was understood at the time. The solicitor translated her wishes into legal jargon and wrote it into her will trust. In this case the crux of the matter is we are about to be penalised for not registering the trust. At the time it was written there was no obligation for the solicitor to register it.

Keep_pedalling

piggy said:

For those of who replied thank you even though the replies are not what I expected. Firstly eskbanker  ironic its meant to be,  but taken in context its true

  Keep_pedalling but your will trust will not require registering until after your death.

I not sure this correct if you check on the TRS site this trust as nearly all trusts do need registering.

It is correct the trust does not exist until you die, it may never exist because you may make a new will before that happens.

  Keep_pedalling this has nothing to do with ISAs so I don’t expect you will get too many readers of this which is probable a good thing because most of it appears to be nonsense. The only catergory I could find to put this in was tax saving, it was not meant to go into isa's. 

As far as the nonsense is concerned, I dont think the fact that you are about to loose a considerable sum of money through no fault of your own is nonsense.

It’s nonsense because you don’t have your facts correct.

 Browntoa the trust was set up by a solicitor who included my mother’s ttwishes into the trust, so it was understood at the time. The solicitor translated her wishes into legal jargon and wrote it into her will trust. In this case the crux of the matter is we are about to be penalised for not registering the trust. At the time it was written there was no obligation for the solicitor to register it.

Is your mother still alive? If she is then again any trust written into a will does not come into force until she dies and if she is unhappy with the trust she can change her will to prevent it ever coming into effect. 

piggy

Keep pedalling please enlighten me on the facts which are not right

piggy

Tacpot 12 thanks for your reply.Its good to hear you were able to assist with someone who has a problem similar to mine. It was reassuring to hear no fine was pending.  From research I have carried out on the net it would appear that my case could be more complex than the one you have just dealt with. The more complex the higher the cost of getting it sorted. My situation is this, My sister and I are trustees of my mothers will, that was set up in March 2016 at that time there was no need to register the trust. I have only recently found out that the trust will need to be registered. The  trust as far as I have been told is a IPP trust. The trust only contains the value of the house and no investments,my brother is allowed to live in it until he dies. Under the terms of the trust, we are allowed to charge him rent, but we never have done. He is responsible for all the maintenance and upkeep of the property. he has  lived in the house for 3 years and then sold it as he is allowed to do and bought another house with the proceeds. He used an additional sum of money that he provided from his own savings to buy a larger house. I am sure that if the trust is registered a revaluation of the property which he has now lived in the house for 5 years will be re assessed. What concerns me and what I have been led to believe is, as property prices have increased and  the tax authorities may include his own personal money, that he has invested in the house, as part of the revaluation.The outcome of this is depends on the interpretation of this by the taxman. This may take the valuation, way above the nil rate band of £325,000 which was the tax free allowance when the trust was set up in 2016.If this is the case it would lead to quite a hefty increase in the tax my sister and I would be responsible for as trustees.Your comments would be welcome

piggy

Keep pedalling,  my original post stated that my mother died in March 2016 So i believe your comments  regarding her trust are nil and void

.However I take your point on my will, yes I am very much alive and that the will does not need to be registered until i die

Willeri

Will trusts don’t come into being until death, then 2 years to register. Trusts created in lifetime need registering when set up. Registration requirement changed in 2023, before that only income bearing trusts needed registering, now most do with some exceptions. The change was as a result of an EU directive which UK followed, ostensibly for ML purposes and property beneficial ownership but taking a cynical view was so HMRC get trusts tax. HMRC didn’t educate public on this introduction. Currently although £5k fine for non registration, HMRC taking view only if deliberate. Trusts can be useful planning, but this is one implication to understand and engage a professional to implement 

Sarahspangles

Willeri said:

Will trusts don’t come into being until death, then 2 years to register. Trusts created in lifetime need registering when set up. Registration requirement changed in 2023, before that only income bearing trusts needed registering, now most do with some exceptions. The change was as a result of an EU directive which UK followed, ostensibly for ML purposes and property beneficial ownership but taking a cynical view was so HMRC get trusts tax. HMRC didn’t educate public on this introduction. Currently although £5k fine for non registration, HMRC taking view only if deliberate. Trusts can be useful planning, but this is one implication to understand and engage a professional to implement 

We didn’t rush to register the trust created on FILs death, we instructed solicitors to draw up the paperwork about 18 months after he passed away, then MIL passed away just before the two year mark so we didn’t have to send it off. I imagine that’s fairly common given many couples are a similar age.

There was actually no need for the trust at all, but it would probably have cost a similar amount for FIL to change his will. 

Marcon

piggy said:

For trustees thinking of registering their own trusts, I would say think twice, before attempting what to me was a daunting task. Having unravelled the sea of paper work, It was time to put pen to paper and start filling in the forms. I got as far as the 2nd page, by then I was so confused dazed and disorientated I started behaving like a blithering idiot, so I decided to throw in the towel, yes I was in danger of drowning in the sea of bureaucratic !!!!!!,  I was now up to my neck in it. Please be aware that this is no easy task and unless you are a Philadelphia lawyer crossed with a Bletchley Park codebreaker don't try and DIY.

After trying to complete these forms I was so frustrated and consumed by anger, that I was in danger of being charged with attempted murder, as all I wanted to do was get hold of these insane morons, who designed these forms. The urge to find them and perform a lobotomy on them was overwhelming. Yes a lobotomy was the answer, they needed to be reprogrammed, in the hope that they would no longer be a threat to those of us who want to keep our sanity and understand plain English.
 

You have my sympathy! It sounds as if you might have been truly going the DIY approach without reference to any of the helpful guides available free online - eg https://www.quilter.com/siteassets/documents/platform/guides-and-brochures/qip22888_registering_trust-guide.pdf

A wet towel round the head and a large glass (or possibly the whole bottle) of your preferred tipple could be a useful aid...