Trust Registration Service. What you need to know.

It’s an online registration service for trustees that was set-up and is managed by HMRC. It enables trustees to fulfil their obligations under Money Laundering regulations by registering information with HMRC about the trust, including its assets and those individuals associated with the trust.

Since 2017, there’s been a legal requirement for trustees to register the beneficial owners of taxpaying trust arrangements to comply with their obligations under Money Laundering Regulations. Originally, the registration requirement covered trusts where there was a tax liability. For example, tax liabilities relating to income, capital gains or inheritance. However, from October 2020, the registration widened to include other trusts – even when there is no tax liability. This means, unless specifically excluded, all UK-resident non-taxable ‘express’ trusts* and some non-UK ‘express’ trusts must now be registered.

*The term ‘express’ trust covers all trusts created by a person transferring their property (you may see this person referred to as the ‘settlor’ or ‘donor’) to a trustee who holds and distributes the property in the trust to the beneficiaries, in accordance with the terms of a written deed or declaration of trust.

Trusts holding investment plans

Almost certainly if the trust holds an investment plan such as a bond, but there are a few exclusions covered in the government guidance.

Trusts holding protection policies

Trusts holding whole of life or term protection policies which only pay out on the death, terminal illness, critical illness, or disablement of the life assured are excluded from registering on HMRC's TRS. That is providing benefits are distributed as summarised below:

• Death claims - The benefit is paid to beneficiaries within two years of the date of death.
• Terminal illness, critical illness or disablement claims - The benefit is paid directly to the settlor/beneficiaries.

Trusts holding protection policies which include a surrender value may also be excluded from registration if:

• there have been no withdrawals/partial surrenders from the policy or
• in the event of a full surrender, benefits are paid directly to a beneficiary.

Regardless of the type of policy, a trust must always be registered should it become liable for tax.

Responsibility lies with the trustees. If there is more than one trustee, a lead trustee should be nominated to complete the registration process and be the point of contact with HMRC. Alternatively, trustees may appoint an agent to register the trust on their behalf.

The deadline for registering a non-taxable express trust in existence on or after 6 October 2020 is the later of:

• 90 days from creation, or
• 1 September 2022.

It’s important you understand the potential need to register, as HMRC may impose a penalty for failure to register, if that failure is found to be deliberate.

There may be times when we are required to obtain proof of registration from you - see some examples in the section below:

• A new trust is applied to an investment policy,
• A surrender (whether partial or full) is instructed on an investment policy,
• A claim (e.g. on death) is made on an investment policy,
• A new regular withdrawal is set-up on an investment policy, an existing withdrawal is increased or is to be paid to a different bank account,
• A partial surrender is instructed on a protection policy and there’s previously been a partial surrender,
• A full surrender is instructed on a protection policy and there’s previously been a partial surrender.

If this proof is not provided when we’re required to obtain it, then it may delay a subsequent payment on the policy.

Once the trust has been registered, you can get proof of registration by downloading a PDF output from the TRS. This can be found by selecting ‘Get evidence of the trust’s registration’ in the TRS.

It’s the trust itself that must be registered. If the trust holds multiple plans, it only needs to be registered once. However, if a number of plans are held in separate trusts, each trust must be registered separately, even if the trustees and beneficiaries are the same.

The registration process starts on the gov.uk website see the following link - Register a trust as a trustee.

The TRS requirements are complicated; as such you may want to seek appropriate professional advice. We are not authorised to give advice; this information is based on our current understanding of the relevant legislation and available HMRC guidance.

For more information about registering trusts and to access the TRS, please refer to the Government guidance at gov.uk.

If you’re completing the Zurich Life plan full or partial surrender form then this section will provide guidance to help you understand if:

• Your trust should be registered on the TRS.
• Whether we are required to obtain proof of registration in order to pay a surrender claim.

It represents our current understanding of the relevant legislation and available HMRC guidance.

The following policies should already be registered. Therefore, we are required to obtain proof of registration before we can make payment:

• Zurich Endowment Non-profit.
• Zurich Endowment With Profits.
• Zurich Flexible Savings Account.
• Zurich Mortgage Repayment Plan.
• Zurich Personal Portfolio.
• Zurich Star Low Cost Endowment.
• Zurich Universal Life Plan.
• Zurich Whole of Life With Profit.
• Those policies ending ‘AC’, ‘AD’, ‘AR’, ‘AS’, ‘CC’, ‘CE’, ‘CR’, ‘CS’, ‘CSL’, ‘DCL’, ‘DCS’, ‘DEF’, ‘DES’, ‘DFF’, ‘DFS’, ‘DIL’, ‘DIS’, ‘DRF’ and ‘DRS’.

Where a surrender is instructed for the following policies and there has previously been a partial surrender claim on the policy, the trust should already be registered. In this instance, we are required to obtain proof of registration before we can make payment. If this is the first surrender on the policy then the trust is not yet registrable and we will not require proof of registration before making payment. However, the trustees would then have 90 days to register the trust and we may request proof at a later stage:

• Zurich Bristol & West Personal Portfolio.
• Zurich Flexible Mortgage Plan.
• Zurich Flexible Protection Plan.
• Those policies ending ‘CDF’, ‘CDL’, ‘CDS’, ‘DBF’, ‘DBL’, ‘DBS’, ‘DDF’, ‘DDL’, ‘DDS’, ‘DMF’, ‘DMS’, ‘DPF’, ‘DPL’, and ‘DPS’.

We will always require proof of registration where:

• The trust has been liable for tax – regardless of the type of policy held, a trust must always be registered on the TRS if it becomes liable for tax.
• The trust holds multiple assets and one of those is an investment (e.g. investment bond or endowment).
• There is a change to all trustees under a registrable trust.

Trust registration is a complex subject and so trustees may need to seek professional advice about their registration responsibilities. If you’re unsure, refer to HMRC or your financial adviser.