Trusts Are Changing – Are you Ready?
Published by Sophie Fillmore on 2021 02 16
What is a trust?
Put simply by The Law Society, a trust is a legal arrangement for managing assets, including cash, property, shares and land.
Who Needs a Trust?
Some of the reasons you might set up a trust include:
- * to protect family assets
- * for the benefit of a young beneficiary
- * for the benefit of a vulnerable family member who cannot handle their own affairs
- * to pass on assets while still alive
What is the Role of the Trustee?
Your financial planner would have explained the reasons and process by which a trust is set up, and one of the most important factors is choosing the Trustees. The Trustees are responsible for holding the trust property and administering it for the benefit of the beneficiaries (the ones benefiting from the trust). It’s an active role and one that comes with a lot of responsibility. The new directive is going to mean they have to play an even more active role going forward.
So What is Changing?
A new directive (5MLD, or the Fifth Money Laundering Directive) has come into force that means all UK Trusts set up before 9 February 2022* will need to be registered by the trustees on the Trust Registration Service (TRS) before 10 March 2022.
According to Canada Life, the trust register provides a single point of access for trustees and their agents to record information. This is regardless of whether the trust has tax liabilities, however where there is tax liability, some additional information will be provided. This adds significant compliance obligations for many trustees, and it’s likely that non-professional or overseas trustees may not be aware of these incoming changes. New trusts created after 9 February 2022 will need to register within 30 days. Furthermore, trustees will need to update the register within 30 days of any changes they become aware of.
For more information, please speak to us and we can offer further guidance on how you can make sure your trust is registered before the deadline.
*There are some exceptions, including but not limited to, vulnerable persons trusts, personal injury trusts and protection policy trusts. Speak to us if you are unsure about whether a trust needs to be registered with the Trust Registration Service.Back