HM Treasury (HMT) have now published a further consultation which proposes to exempt charitable trusts from the requirement to register with the Trust Registration Service (TRS) unless they have a tax liability.
This maintains the current exemption which was under threat due to the 5th Anti Money-Laundering Directive (5 AMLD), due to be implemented in January 2020.
If any Trustees are aware of any non-taxpaying charitable trusts that will not fall within the proposed exemption (see below) they should reply to the consultation, as these will still be required to register unless the draft legislation is changed.
In April 2019 HMT published a consultation document on 5 AMLD proposing that all express trusts (which includes all charitable trusts set up by will or by trust deed) should be required to register with the TRS.
A number of responses pointed out that this would require the registration of thousands of small, and possibly dormant, charitable trusts that are already registered with and regulated by the Charity Commission. A further consultation in October 2019 was expected, but nothing had been issued by the end of December.
Our insight published 23 December 2019 warned charities that, failing any further communication, it looked as though the Treasury’s proposals for forcing all express trusts to register with the TRS would be implemented in UK legislation in January 2020.
Although the new anti-money laundering legislation in fact came into effect on 10 January 2020 it omitted mention of the Trust Registration Service.
The new consultation can be accessed here.
HMT now proposes to exempt from registration all non-taxpaying trusts that are set up for charitable purposes and that are either:
Charitable trusts which have a tax liability to any of the following taxes will still need to register with the TRS.
If you need any further help regarding the consultation, please contact us.