How the HMRC Trust Registration Service Affects UK Family Trusts

The UK government’s effort to increase transparency and tackle financial crime has led to significant changes in how trusts are managed and reported. One major initiative is the HMRC Trust Registration Service (TRS), a central online register introduced to ensure that trusts are properly recorded and identifiable by tax authorities.

For families managing trusts—whether for estate planning, wealth preservation, or supporting vulnerable beneficiaries—understanding the impact of the HMRC Trust Registration Service is crucial. In this expert guide, we’ll explain what the TRS is, how it affects UK family trusts, who needs to register, and what steps to take to remain compliant.

What Is the HMRC Trust Registration Service?

The HMRC Trust Registration Service was launched in 2017 to create a database of the beneficial ownership of trusts in the UK. It’s part of the UK's implementation of the EU's Fourth and Fifth Anti-Money Laundering Directives (4MLD and 5MLD), even post-Brexit.

The TRS aims to:

• Improve transparency around the ownership of trust assets
• Deter the use of trusts for money laundering and tax evasion
• Support HMRC’s oversight of trust income and capital gains

All registrable trusts must provide key information about the trustees, settlors, beneficiaries, and assets involved.

Does the TRS Apply to UK Family Trusts?

Yes. Many UK family trusts are required to register with the HMRC Trust Registration Service, even if they are not taxable. Under recent changes to the law, most express trusts—those created deliberately (e.g. by a will or a deed)—must be registered, whether or not they owe tax.

Types of Family Trusts That May Need to Register:

• Discretionary trusts
• Interest in possession trusts
• Bare trusts
• Will trusts that continue for more than two years after death
• Trusts holding life insurance policies (in some cases)

If you have established a trust to manage family wealth, provide for a disabled child, or pass assets on to grandchildren, you are likely affected.

Key Registration Deadlines and Requirements

As of 1 September 2022, nearly all express trusts—except for a few narrowly defined exemptions—must be registered.

Registration Deadlines:

• Non-taxable trusts in existence on or after 6 October 2020: must be registered by 1 September 2022
• New non-taxable trusts created after 1 September 2022: must be registered within 90 days
• Taxable trusts: must register within 90 days of the trust becoming liable for UK tax

Trustees who fail to register or update their information may face financial penalties and legal risks.

What Information Is Required by HMRC?

When registering a family trust on the HMRC Trust Registration Service, trustees must provide:

• Trust name and type
• Date the trust was established
• Details of the settlor (person who created the trust)
• Information about trustees and beneficiaries
• National Insurance numbers or passport details for UK-resident individuals
• Details of trust assets if the trust is taxable

You must also keep this information up to date—reporting any changes within 90 days.

Exemptions for Family Trusts

Some family trusts are exempt from registration, but the list is narrow. Exemptions include:

• Trusts created by a will and wound up within two years
• Trusts used to open a child’s Junior ISA or bank account
• Bereaved minor trusts
• Trusts holding life insurance policies (only if the policy pays out on death or critical illness and no other assets are held)

If your trust doesn’t fall under these specific exemptions, it must be registered—even if it pays no tax.

What Are the Risks of Non-Compliance?

Failing to comply with the HMRC Trust Registration Service can lead to:

• Financial penalties (ranging from £100 to £5,000 per trust)
• Delays in dealing with probate or asset transfers
• Loss of trust integrity in the eyes of HMRC
• Increased scrutiny or audits

Additionally, unregistered trusts may be flagged when attempting to sell property, distribute funds, or interact with legal and financial professionals.

Benefits of Registering Your Family Trust

Though the TRS may seem like another layer of bureaucracy, there are advantages to registering your trust:

• Legal clarity: Ensures your family trust is properly documented
• Peace of mind: Avoid penalties and HMRC scrutiny
• Estate planning efficiency: Helps with transparency when passing down wealth
• Improved access to legal and financial services: Many institutions now require TRS registration proof to open accounts or handle trust-related transactions

Staying compliant means your family trust continues to serve its purpose—safeguarding assets for future generations.

How to Register a Family Trust with HMRC

You can register via HMRC’s online Trust Registration Service portal. The process involves:

1. Creating a Government Gateway account for the lead trustee
2. Completing the online TRS form
3. Uploading details about all involved parties (trustees, beneficiaries, etc.)
4. Submitting the declaration

You can also use a tax adviser or accountant to complete the registration on your behalf.

Once registered, you’ll receive a unique reference number (URN) which can be shared with financial institutions or HMRC if requested.

Keeping Your Family Trust Details Up to Date

The job doesn’t stop once your trust is registered. HMRC requires that you:

• Update any changes (e.g., new trustees, deaths, changes in beneficiary status) within 90 days
• Confirm annually that no changes have occurred (if applicable)

This ongoing responsibility is a key part of TRS compliance.

Practical Example: A Family Trust Supporting Children’s Education

A couple in Kent set up a discretionary family trust in 2019 to help fund their grandchildren’s future university fees. Although the trust was non-taxable, it held over £30,000 in cash and investments.

Following the rule changes in 2022, they were legally required to register with the HMRC Trust Registration Service. With the help of a financial adviser, they:

• Set up a Government Gateway account
• Registered the trust within 90 days
• Updated details when one trustee stepped down

Thanks to proper registration, the family avoided penalties and were able to use the trust to pay tuition fees without delays.

Conclusion: Take Action to Protect Your Family Trust

If you manage or are involved in a UK-based family trust, it’s essential to understand the obligations imposed by the HMRC Trust Registration Service. Registration isn’t just a formality—it’s a legal requirement that can impact your ability to manage and distribute trust assets.

By ensuring that your trust is properly registered, updated, and compliant, you protect your family’s financial legacy and reduce the risk of unnecessary complications.

Need expert help with trust registration? The Infinity Group offers professional guidance and support for trustees navigating the HMRC Trust Registration Service. Contact us today to ensure your trust is fully compliant.