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UK: Extension of Trust registration deadlines

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Extension of the deadline for the registration of relevant trusts subject to the new regulation in force since October 2020. The deadline, initially set to 10 March 2022, has been extended to October 2022.

Regulatory framework and type of trust affected by the new regulation – starting as of October 2020 the fifth EU anti-money laundering directive (5MLD) broadened the number of trust entities that are required for registration in the UK. Under the new regulation, in addition to any “taxable relevant” trusts (i.e. those that are tax liable in UK), now also other categories of trusts are required to register even if “not taxable relevant” (not tax liable in UK), unless they are already registered in another country of EEA or explicitly excluded (i.e. trusts with low-risk of use for money laundering: trusts constituted for charitable purposes or for the benefit of weak (vulnerable) subject, will trusts or trust holding benefit deriving from an insurance policy (trusts that only receive benefits from a life insurance) and which are liquidated within two years since the settlor’s death, trust where the trustee is also beneficiary of the trust).
 
The trusts with registration obligation pursuant to the 5MLD have been divided into three categories (Type A, Type B and Type C):

Type A: “UK express trust”, i.e. a UK trust which has been constituted intentionally by way of proper deed/instrument of the settlor or established by law (express) and which is not already registered in another EEA country.
A UK express Trust can be qualified where:
  • the trustee, or at least one of them, is resident in UK and the settlor was resident and domiciled in UK at the time of the set-up of the trust;
Type B: “Non-UK express trust”, i.e. not-UK trust intentionally constituted by the settlor or established by law (express) and which is not already registered in another EEA country.
A not-UK express Trust can be qualified where:
  • at least one trustee is resident in UK, acquires interest in lands or properties in UK (included a lease agreement for a period over 7 years) and starts a professional or commercial business relationship for long period (one year or more) with UK service providers (law firm, advisors, accountants, wealth managers etc.). Registration is required only if the purchase of property or the business relationship occurred after the entry into force of the new regulation.
Type C: “Non-UK express trust” which differs from Type B trust:
  • none of the trustees are UK resident and acquires land or properties in UK (included a lease agreement for a period over 7 years). On the other hand, the professional or commercial business relationship with UK services providers does not requires for registration.

Registration must be done online with the Trust Registration Service (TRS).

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