Trusts are becoming an increasingly common part of people’s wills and financial planning and can be created for lots of different reasons. The rules are changing in September so here’s what you need to know if you already have a trust in place or are planning to create one.

What’s changing?

Under the current rules, you only have to register a trust if you need to pay tax on it. That could be inheritance tax, capital gains, income tax or any other type of tax. The trust is registered with HMRC so they can monitor the tax position.

The new rules mean that some trusts will need to be registered even if you don’t have to pay tax on them. A trust must now be registered if it meets new criteria that are being introduced. The rules are being changed in a bid to combat money laundering and to make individuals’ financial dealings more transparent.

What types of trust are involved?

Various types of trust can potentially be included under the new rules. This can include trusts that are set up during someone’s lifetime, for example, if your parents have put their house in trust to protect it from care home fees.

A trust needs to be registered if the assets are going to be held for more than 2 years. This often happens if you have beneficiaries who are under 18. That could be where a grandparent leaves some money for their infant grandchildren or if you have a life cover policy for the benefit of your children.

These are just examples so it’s important to get professional advice to find out if the rules apply to you.

How do you register a trust?

The trustees are responsible for registering the trust with HMRC. You can get help and support from a professional, such as an accountant if you need it. In fact, Parliamentary discussion about the new rules has acknowledged that people should be given time to get professional advice as so many trusts will now need to be registered.

The registration process itself is simple. You can complete it online using this link – https://www.gov.uk/guidance/register-a-trust-as-a-trustee#how-to-register

It’s a good idea to gather all the information you need before you start the process to make the whole thing quicker and easier.

What information do you need to register a trust?

Here’s the information you need to collect before you register a trust.

Firstly, you need details of the people involved. This includes both the trustees and the beneficiaries. If the trust has named beneficiaries you’ll need their name, date of birth and National Insurance number. If they don’t have an NI number yet you can use another official form of ID. If beneficiaries are a class of person (such as a person’s children or grandchildren) rather than named individuals you can include that instead.

Secondly, you’ll need to confirm the type of trust. The type of trust depends on how it was created so get professional advice if you’re not sure.

Finally, you’ll need the name of the trust and the date it started.

Do you need help and guidance with trusts or how to register them? Get in touch using the form below or call us on 0116 380 0752.