On 16 July 2020, HMRC published its responses to its technical consultation of the Fifth Money Laundering Directive in relation to the UK Trust Registration Service (TRS). The response document which can be found here provides some welcome news for offshore trustees entering into a business relationship in the UK as it states that they will not have to register the trust on the TRS unless there is at least one UK resident trustee. This means that non-UK trusts will not need to register on the TRS if their only link with the UK is through a business relationship with a UK based adviser.
HMRC also confirms that the following types of trusts will be exempt from registration on the TRS:
- trusts imposed by statute, where these do not result from the clear intention of the settlor. For example, the statutory trust arising on intestacy;
- UK registered pension trusts;
- charitable trusts regulated in the UK;
- pure protection life insurance policies and those paying out on critical illness or disablement, including group policies;
- trusts used by government and other UK public authorities;
- trusts for vulnerable beneficiaries or bereaved minors;
- personal injury trusts;
- save as you earn schemes and share incentive plans;
- maintenance fund trusts;
- certain trusts incidental to commercial transactions;
- certain trusts used as part of financial markets infrastructure;
- authorised unit trusts;
- co-ownership trusts, where the trustees and beneficiaries are the same persons;
- will trusts created on death that only receive assets from the estate and trusts that only receive death benefits from a life insurance policy and are wound up within 2 years of death; and
- existing trusts holding assets valued at less than £100 unless or until further assets are added.
There is still a requirement for non-UK trusts acquiring UK land and property to register on the TRS within the required time limits. These trusts will be on the register but will not be subject to the third-party data sharing provisions unless they are required to register under one of the other categories.
It is also important to note that the obligation for non-UK trusts with a UK tax liability to register on the TRS under the current process in place for the Fourth Money Laundering Directive remains unchanged.
