Only a tiny proportion of those who own non-taxable trusts have registered them with HM Revenues and Customs’ (HMRC’s) Trust Registration Service (TRS), just weeks before the deadline on 1 September.
A total of 61,700 of the UK’s estimated one million trusts were registered with the HMRC service in the first six months of 2022, according to data obtained via freedom of information (FoI) request filed by accounting firm Saffery Champness.
The data showing that only six per cent of trusts were registered in the first half of the year comes as those who fail to register their trusts by 1 September could face fines of up to £5,000.
HMRC first introduced requirements that trust holders register their trusts with the TRS in 2017 in a bid to crack down on money laundering.
The requirements were expanded last year to include trusts that do not have a tax liability, subject to certain exemptions for pensions and charitable trusts.
Those who deliberately fail to register their trusts are liable to face penalties of £5,000. However, the HMRC has said it will not issue penalties for first time offences, as for most trust holders the registration requirements are unfamiliar obligations.
Allan Holmes, a partner at Saffery Champness, said: “The fact that in the first half of this year a little over 60,000 trusts were registered with the TRS, when up to a 1m need to do so by September, suggests many trustees may still be in the dark about their reporting obligations and may have to act fast to avoid falling foul of the rules.”
“For any trustees who are not completely certain that their trust has been registered with the TRS, perhaps because the trust was created by an agent, it is vital they speak to the agent or advisor as soon as possible to double check this has been done, ahead of the September deadline,” Holmes said.