HM Revenue & Customs (HMRC) has published new guidance relating to non-registration or failure to maintain a trust on the Trust Registration Service (TRS).
The guidance confirms that penalties will not be issued in all cases of non-registration. “Registering a trust is a new requirement and we recognise that trustees may not be familiar with the process,” said HMRC, adding that a penalty will not be charged where:
- Non-registration was not deliberate behaviour
- Action was taken to correct this within the time limit set by HMRC
The decision to charge a penalty is taken on a case-by-case basis. Those who receive a penalty can request a review or appeal, but the request must reach HMRC or HM Courts and Tribunals Service within 30 days of the issuing of the penalty.
The full guidance documents published by HMRC can be viewed below:
- When HMRC will issue a penalty charge for not registering or maintaining a trust
- Ask for a review or appeal against a trust penalty charge
- Pay a penalty charge for not registering or maintaining a trust
The TRS had 198,000 trusts and estates registered up to 31st March 2022, though this number likely continued to climb leading up to the 1st September deadline.
However, Today’s Wills and Probate reported in September of last year that HMRC had encountered “significant uncertainties” in estimating the true number of trusts obliged to registered on the TRS. What’s more, they said that, at the time of writing, zero non-registration penalties had been handed due to a deliberate failure to register.
The total number of trusts and estates that have made Self Assessment (SA) returns has continued to decline, reducing by 6% in the tax year ending 2021 in comparison to the previous year.