Nearly 62,000 trusts (61,692) have been registered with HMRC in the first six months of 2022 as the deadline to register a trust approaches.
A total of 211,381 trust registrations have been received by HMRC since the Trustee Registration Service (TRS) began in June 2017.
The number of trust registrations increased by almost 60,000 in five months, almost double the total number received in 2021. Over 36,000 applications were received in May and June alone, according to a freedom of information request submitted to the taxman by Canada Life.
Incoming rules from HMRC on trusts stipulate that any express trust must register details of the settlors, trustees, and beneficiaries with the TRS by 1 September, with any trusts created after this date having 90 days to register.
Discretionary and absolute trust are subject to the rules, including any discounted gift trust, loan trust and gift trust.
Stacey Love, tax and estate planning specialist at Canada Life, said there are around a million trusts that still need to be registered and financial advisers need to highlight the process to their clients.
She said: “It’s great to see that the message to register is starting to get through to Trustees, however the clock is ticking and we still have a long way to go to ensure all the trusts that are required to register do so by the deadline.
“Using a trust has been such a fundamental part of the tax and estate planning landscape for so long it’s entirely possible the existence of a trust may have faded into the background. As a result, many ‘ordinary’ people who are trustees may not realise that TRS registration still applies, unless they pay close attention to the financial press or receive regulatory updates from HMRC. With no central HMRC communication it’s imperative that providers and advisers work together to flag up these new rules with all of their trustee clients affected by the regulations.
“With around 1 million trusts needing to be registered there is still a significant amount of work to complete and the onus is on advisers and providers to highlight the process to trustees.”
Recent research from HSBC Life showed that two in three (62%) advisers with clients who are trustees or have interests in trust are concerned that their clients could be risking HMRC fines.
One in 10 (13%) advisers told HSBC Life that they were very concerned.
