Do You Need to Register Your Trust With HMRC?

Two separate groups of trusts fall within the service. The first is taxable trusts. A UK resident trust that becomes liable to income tax, capital gains tax, inheritance tax, stamp duty land tax, land and buildings transaction tax in Scotland or land transaction tax in Wales has to register. A non-UK resident trust comes into the same group once it becomes liable to any of those taxes on UK assets or UK income.

The second group is wider and catches far more trustees. All UK resident express trusts have to register even where no tax is due, unless a specific exclusion applies. An express trust simply means one that was deliberately created, usually by a deed or by a will, as opposed to one that arises by operation of law. A trust that needs a unique taxpayer reference, for example to report non-resident capital gains, also has to register regardless of its position otherwise.

Certain non-UK express trusts are drawn in too. That includes a trust that acquires UK land or property after 6 October 2020, a trust that acquired UK land before that date and still held it on 30 June 2026, and a trust with a UK resident trustee that enters into a business relationship in the UK. The second of those is worth flagging, because trustees of older offshore structures holding UK property have a registration deadline of 1 September 2027 and the service has not historically been able to accept those registrations, which means the obligation has been sitting dormant rather than discharged.

The exclusions are set out as a list rather than as a principle, which is why trustees so often guess wrongly. They apply only where the trust has no UK tax liability.

There is a general exclusion for a small trust, but it is tightly drawn. The trust must hold no interest in UK land, hold no assets of appreciable worth above £2,000, never have held property with a cumulative value above £10,000, have no income above £5,000 a year, and have no UK tax liability. Only one trust per settlor can qualify under it, so a settlor who has created several small trusts cannot shelter all of them.

Beyond that, the excluded categories include statutory trusts arising by court order or by law, trusts holding the assets of a UK registered pension scheme, trusts holding life insurance policies that pay out only on death, illness or disability, trusts for a UK registered charity, trusts set up purely to open a bank account for a child, will trusts that are wound up within two years of death, pilot trusts holding less than £100 that were created before 6 October 2020, co-ownership trusts where property is held by tenants in common, trusts established by government or a UK public authority, and survivorship destination trusts in Scotland. Several less common categories are excluded as well, and HMRC's published list is the one to work from rather than a summary of it.

The two-year will trust exclusion deserves particular attention. An estate that takes longer than two years to administer, which is common where property has to be sold or where a claim is made, can tip a will trust into the registrable category without anyone making a decision about it. Our article on what probate involves sets out why administration periods run on.

For a non-taxable trust created after 6 October 2020, registration is due within 90 days of the trust being created or of it becoming registrable. Non-taxable trusts created before that date were required to register by 1 September 2022, so any that were missed are already late rather than merely due.

For a taxable trust created on or after 6 April 2021, the deadline is within 90 days of the trustees becoming liable to tax. For a taxable trust created before 6 April 2021, the deadline runs from the end of the tax year in which the liability arose: 5 October after that tax year where the trust is becoming liable to income tax or capital gains tax for the first time, and 31 January after that tax year where it has been liable before or where the liability is to another tax such as inheritance tax.

Where more than one deadline could apply, the earlier one governs. One practical consequence is worth drawing out. A trust that disposes of UK residential property has to register as a taxable trust before the capital gains tax on UK property account can be submitted, and that return itself is due within 60 days of completion, which is explained in our article on the 60 day capital gains tax property deadline. Registration therefore has to happen inside a window shorter than 90 days.

Registration is not a single event. Changes to the trust's details or to its beneficial ownership have to be recorded within 90 days of the trustees becoming aware of them. That covers a change of trustee, a change of address, the addition or removal of a beneficiary and a change in the class of beneficiaries. Asset values recorded at registration do not need annual refreshing.

A taxable trust has a further obligation. The trustees have to make a declaration each year by 31 January following a tax year in which there was a liability, confirming the record is accurate. A non-taxable trust that becomes liable to tax has to change its status, within 90 days for most taxes, or by 5 October after the relevant tax year where the trust was created before 6 April 2021 and the liability is to income tax or capital gains tax.

Trusteeship changing hands is where records most often drift. A new trustee inherits the obligation along with the role, and a trust that was registered correctly in 2022 by someone who has since stepped down may have had nothing recorded since.

Failing to register can lead to a penalty of up to £5,000. HMRC has said it intends to apply the regime proportionately, and in practice first contact about an unregistered trust has often taken the form of a reminder rather than an immediate penalty, but that is an approach rather than an entitlement and it may be applied differently in different circumstances.

There is a second consequence that bites sooner than any penalty. Registration produces the reference that trustees need in order to deal with HMRC and, in many cases, in order to satisfy a bank, a platform or a conveyancer carrying out its own checks. An unregistered trust can find itself unable to complete a transaction at the point it matters, which tends to focus attention rather more effectively than the penalty does.

Registration is a transparency obligation and it is separate from the trust's tax position. A relevant property trust still has its own inheritance tax cycle, with a charge at each ten year anniversary at an actual rate that cannot exceed 6%, calculated by reference to the nil-rate band available to it. The nil-rate band is £325,000 and is fixed at that level for 2026/27 and 2027/28. Our article on discretionary trusts sets out how that cycle works, and the wider position is covered in inheritance tax explained.

Income tax and capital gains tax reporting are separate again. Trustees other than those of a trust for a disabled person have a capital gains annual exempt amount of £1,500 for 2026/27, against £3,000 for an individual, and pay capital gains tax at 24%.

Registration does not change any of that. It sits on top of it, and the mistake trustees make most often is assuming that a trust with nothing to report to HMRC has nothing to register with HMRC.