This means that the partnership is potentially within the Trust Registration Service (TRS) even though no formal trust is in place. TRS is operated by HM Revenue & Customs (HMRC) and provides a single point of access for trustees and their agents to either register a new trust or for an existing trust to comply with their registration obligations under anti-money laundering regulations.
The initial phase of the service only applied to UK trusts if they incurred a tax liability in a given tax year. This means that up until recently there has been no obligation to register for land held in trust, but as the scope of the Trust Register has now been extended to most UK trusts that were in existence at 6 October 2020, regardless of whether the trust has to pay any tax, action may now be required.
To check whether your arrangements are subject to TRS, you need to confirm the ownership of any land and property reflected on the partnership balance sheet. To be sure, you may need to check the documentation held at the Land Registry, for all the property in the partnership. Depending on how those named on the deeds compare with the individual partners, there may be scenarios in which a trust needs to be registered with HMRC.
Should this be the case, you could register yourself via HMRC’s website. Alternatively, many financial or legal advisers will provide this service for a fee and they are contacting clients in any event as they will require proof of registration before conducting any new business with you.
Access to the TRS opened for non-taxable trusts from 1 September 2021 and there is an obligation to register by 1 September 2022. Potentially penalties of up to £5,000 per trust can be charged for non-compliance although we understand that HMRC will apply a light approach for first non-deliberate offences.
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