Trusts and taxes
When you must register a trust
Most trusts need to be registered. There are some cases where you do not need to register.
You never need to register a trust that was imposed by a court or created through legislation.
You can get advice from a solicitor or get advice from a tax advisor about when to register a trust.
If your trust is liable for UK taxes
You must usually register your trust with HM Revenue and Customs (HMRC) if it becomes liable for any of the following:
- Capital Gains Tax
- Income Tax
- Inheritance Tax
- Stamp Duty Reserve Tax
- Stamp Duty Land Tax or Land and Buildings Transaction Tax (in Scotland)
- Land Transaction Tax (in Wales)
You must also register a trust to claim tax relief.
Non-resident trusts
You must register a non-resident trust if it becomes liable for:
- tax on UK income
- tax on UK assets
If your trust is not liable for UK taxes
You must register your trust even if it’s not liable for UK taxes - unless any of the following apply.
You do not need to register your trust if it:
- holds money or assets of a UK registered pension scheme - like an occupational pension scheme
- holds life or retirement policies (as long as the policy only pays out on death, terminal or critical illness or permanent disablement, or to meet the healthcare costs of the person assured)
- holds insurance policy benefits received after the person assured has died (as long as the benefits are paid out from the trust within 2 years of their death)
- is a charitable trust that is registered as a charity in the UK or which is not required to register as a charity
- is a ‘pilot’ trust set up before 6 October 2020 and holds no more than £100 - pilot trusts set up on or after 6 October 2020 need to register
- is a co-ownership trust set up to hold shares of property or other assets which are jointly owned by 2 or more people for themselves as ‘tenants in common’
- is a will trust created by a person’s will and comes into effect when they die (as long as they only hold the estate assets for up to 2 years after the person’s death)
- is for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme
- is a ‘financial’ or ‘commercial’ trust created in the course of professional services or business transactions for holding client money or other assets
Some financial products and arrangements with ‘Trust’ in their description (like the Child Trust Fund or Venture Capital Trusts) are not really trusts. Get advice from a solicitor or get advice from a tax advisor if you’re not sure.
How to register
How you register a trust depends on whether you’re:
There’s a different process if you need to register an estate of someone who’s died.