A failure to register trusts with the Trust Registration Service by 1 September could leave clients at risk of being hit with a fine, advisers have warned.
Research by HSBC Life found that nearly two thirds (62%) of advisers with clients who are trustees or have interests in trusts, are concerned their clients could be risking HMRC fines, with 13% feeling very concerned.
The incoming rules mean any express trust must register details of the settlors, trustees and beneficiaries with the TRS by 1 September 2022, while trusts created after this date will have 90 days to register. Discretionary and absolute trusts are subject to the rules, including any discounted gift trust, loan trust and gift trusts.
HSBC Life said 39% of advisers have already contacted clients about their new responsibilities and 26% plan to do so soon. Only 17% have no plans to do so and 8% said they were unaware of the new rules.
Mark Lambert, head of onshore bond distribution at HSBC Life, said: “Advisers are clearly concerned about the risk of fines for clients failing to comply with the new TRS rules. Where an onshore investment bond is used for inheritance tax and intergenerational planning, trusts are an important part of the solutions that advisers provide for their clients. HSBC Life is committed to supporting advisers and their clients, which is why we are highlighting that the requirement to register with the TRS must now be included as part of the process.”
According to TRS rules, trustees have the legal responsibility for registering the trust and need to nominate a lead trustee who will be the main point of contact with HMRC.
HSBC Life says the support of advisers, who hold most of the information needed by trustees to register, will be invaluable in helping clients meet the deadline.
