HMRC "Trust Registration Service" registering trusts for life policies

[yorkshirelad1]

It looks like I might have to register a couple of trusts that hold just a life policy each. I’m waiting for clarification from the IFA, but an answer isn’t forthcoming speedily, so I’m getting lined up (just in case) as the 1 Sept 2022 deadline is approaching. There is apparently an exemption for trusts that include life insurance policies that pay out only on death, but due to the nature of the policies (mainly due to the possibility of surrender and the type of underlying investment), the exemption may not apply, and this is what’s causing the delay.

Has anyone registered a trust that holds a life insurance policy or similar?
Is it possible to do it yourself (as a layperson) or is it better/needed/required to use e.g. an accountant?
How arduous is it?
Can it all be done online (I’m already registered for the govt gateway)?
What information needs to be provided?

TIA

[Parky]

Can it all be done online (I’m already registered for the govt gateway)?
What information needs to be provided?

TIA

Yes it can be done online via the government gateway. The information is as you would expect, details of the settlor, trustees, beneficiaries, name and date of setting up trust etc. Just takes a few minutes when you have all the data.

I can't comment on whether these particular trusts need to be registered. There seems to be considerable confusion amongst product providers (insurance and investment companies) and expert advisers in this field (and within HMRC itself) about which trusts are exempt.

[scrumpyjack]

It's quite easy but I found you need a separate government gateway registration. Your personal one cannot be used.

[yorkshirelad1]

Many thanks for the helpful tips and suggestions. All very useful.

[yorkshirelad1]

Just spent an afternoon gathering and doing registration for 4 life insurance policies that are written in trust. It's fairly straightforward once you have all the necessary info assembled.

These trusts have to be registered, but nowhere in the registration process does it ask what the assets in the trusts are. Since apparently this registration is to combat money laundering, it seems quite strange that it's not necessary to declare what assets are in the trust.

Also, the settlor of two of the trusts is deceased (which would seem to be not so unusual) but the online reporting processes doesn't seem to cope very well with a deceased settlor. I may try and speak to the HMRC trust helpline tomorrow, but I'm not expecting a great deal.

[bluedonkey]

My guess is that less than 10pc of trusts like yours get registered.

[yorkshirelad1]

My guess is that less than 10pc of trusts like yours get registered.

That suprised me, but does not surprise me. I suspect some people will have life insurance taken out years ago e.g. by parents, not know much about it, and not know if it's in a trust or not, or not even be aware of the TRS and that it may apply to them. There hasn't been a great deal of publicity about this, or a few articles in the Saturday Money sections of the usual papers. It may come to bite many people (executors!) on the backside when there's a death claim. Also, it shouldn't take much for HMRC to contact various insurance companies and ask which life policies have trusts attached to them and haven't been reported on the TRS. Insurance companies know this information: I (thankfully) had a letter from one of mine (Canada Life) confirming that the life policy I have (under a trust) does _not_ need to be reported in the TRS.

[yorkshirelad1]

Also, the settlor of two of the trusts is deceased (which would seem to be not so unusual) but the online reporting processes doesn't seem to cope very well with a deceased settlor. I may try and speak to the HMRC trust helpline tomorrow, but I'm not expecting a great deal.

I've just spoken to the HMRC Trusts helpline re a deceased Settlor. They are familiar with this and it seems a frequent question they are asked. The suggestion was to answer the Settlor questions re nationality, residence and mental capacity about a deceased settlor ("don't know" for capacity worked for me) as best you can. The suggestion to getting the form changed to something a bit more sensitive/flexible (since a deceased Settlor is probably not that uncommom) was met with the comment that it takes months to get one word on those forms changed, let alone whole questions ....

[yorkshirelad1]

Useful article in today's FT
FT: 20 Aug 2022 “Deadline looms for trustees of non-taxable trusts”
https://www.ft.com/content/07ccd182-4528-48a1-a89c-b3a62aaf10f2
https://www.google.co.uk/search?q=site%3Aft.com+deadline+looms+trustees+non-taxable

[yorkshirelad1]

Sunday Times 11 Sept 2022: "HMRC backtracks on fines for trusts"
https://www.lemonfool.co.uk/viewtopic.php?f=49&t=35901