The HMRC Trust Registration Service (‘TRS’) Manual was updated on 20 July 2022. The scope of trust arrangements that need to register with the TRS has been extended, with limited exceptions.
The following are examples of trusts and/or arrangements that will need to be registered (unless they have been specifically excluded) even if they have no tax liability:
For Partnerships (in general)
A partnership does not have its own separate legal identity and as such assets and property cannot be held in the name of the partnership, instead they are usually held in the name of a partner or partners for the benefit of the whole partnership. A partner who is holding property or assets, on behalf of the partnership, does not automatically create an express trust that requires registration on the TRS as, unless otherwise set out in writing, the Partnership Act 1890 applies a presumption that all assets belong to the partnership as a whole. However, in certain situations, it may be declared (ie using a written deed) that property and or assets are being held by one or more partners on trust for the partnership. If so, the new TRS guidance suggests that this would create an express trust that would require registration on the TRS, unless a relevant exclusion applies.
For GP Partnerships
The changes may be relevant to GP partnerships, where there is a written partnership agreement or declaration of trust deed that sets out that some, or all the partners hold the property or other trading assets on trust for the partnership and or other individuals.
If this is the case and no other exclusions from registration apply, the GP partnerships may be required to register with HMRC, before 1 September 2022, to avoid penalties.
GP Partnerships should contact their solicitors to review their partnership arrangements, and their accountants or financial advisors for further details on the TRS, its exclusions and how to register.
For further information, please contact:
Justine Lee, Hill Dickinson
justine.lee@hilldickinson.com
