We are delighted to announce that Marcus Crawley has recently been appointed an Associate Solicitor in the Family Law Team, here at Hughes Paddison. With one of the largest Family Departments in Gloucestershire, Marcus is looking forward to helping even more families across the county and beyond, often when they are facing some of life’s toughest challenges.
What does it take to become an Associate at Hughes Paddison, one of Cheltenham’s burgeoning law firms? We caught up with Marcus, who was still brimming with pride and excitement, and here’s what he had to say.
Trust Registration Service Deadline Announced
- AuthorCaroline Farmer
If you’re a Trustee, there are some major changes to the HMRC’s online Trust Registration Service (TRS) that are now in force. Before we get into the details, here’s a brief overview of what it means to be a Trustee and your responsibilities.
Are you a Trustee?
Being a trustee means you take responsibility for money that’s been put in a trust for someone else. You’ll manage the money for them, only use it in their best interest and obey the rules of the trust.
What is a trust?
A trust is a way to manage money or other assets for someone else.
There are three main people involved in any trust:
- The settlor – the person who puts the assets or money into the trust.(Known as the ‘Granter’ in Scotland)
- The beneficiary – the person who benefits from the trust.
- The trustee – the person who manages the trust.
The settlor is responsible for appointing the trustee to administer the trust and decide who the beneficiaries of the trust are.
There might be more than one settlor, beneficiary or trustee involved in a trust. A trust can be created in the settlor’s lifetime or could be created by their Will.
Someone might set up a trust for a beneficiary because the beneficiary:
- is too young to manage their own affairs, typically under 18
- is an older person who needs to pay for long-term care, or
- has a permanent disability which means they can’t manage their own affairs.
Are you a trustee or think you might be?
If you are, then there are further requirements for trustees to be aware of as major changes to the HMRC’s online Trust Registration Service (TRS) are now in force.
The new rules mean that almost all UK non-taxable express trusts in existence as at 6 October 2020 or created since that date, must be registered on the TRS by 1 September 2022 regardless of whether the trust has tax liabilities. This is the case even if the trust had been brought to an end before 1 September 2020.
After 1 September 2022, there are strict time limits for registering a newly created trust.
The online TRS was introduced in 2017 to replace the paper-based system to register trusts with HMRC and to prevent money laundering, terrorist financing, minimise tax evasion and provide trustees with a way of applying for a tax reference for a trust.
Previously, only trustees of trusts that pay tax were required to register. Almost all UK express trusts now must be registered even if they have no tax liability. Furthermore, even some non-UK express trusts will be required to be registered.
Some trusts are exempt from registration but even if a trust falls under one of the listed exemptions, it will be required to be registered if it has UK tax liabilities.
Once a trust is registered, trustees are under a duty to make sure that the register for the trust is kept up to date and so must notify HMRC of changes to the trust, for example if there is a change to the trustees.
Ultimately, it is the trustees’ responsibility to ensure that a trust is registered on or before the above deadlines. Failure to do so may result in penalties being issued by HMRC.
Trustees should now urgently consider whether the mandatory registration rules apply to them. If they are unsure whether the rules apply, they should obtain appropriate advice.
Trusts can be created by people in their lifetime or can be created by a Will. If you are a trustee, or think you might be, please consider taking advice sooner rather than later so that you can comply with the new registration requirements.
If you have any questions about an existing trust or a trust you wish to create, please contact a member of our Private Client department who would be delighted to assist you.