The launch of the Trust Registration service is less than a month away, and HMRC has confirmed that it will take a ‘soft landing’ approach to penalties in the first instance.

Initially, fines will be waived if HMRC identifies accidental non-compliance, illustrating their understanding of the need for those impacted to get used to the new process.

However, leniency will not be shown to repeat offenders, who could face penalties of up to £5,000.

Trust Registration service

From 1st September, all UK and non-UK trusts with a liability to UK taxation arising from UK income or UK assets are required to register on the Trust Registration service.

The compulsory registration requirement was originally scheduled to come into force on 1st January this year but, as with countless other plans, was delayed due to the effects of the pandemic.

Even without tax liability, the register now includes express trusts, which are created by a written deed.

Once initially registered, any changes to trusts must be declared within 90 days.

Furthermore, there will be a requirement for the submission of an annual confirmation that details are correct.

We have discussed the new service in further detail here.


As discussed, HMRC will waive fines in the event of non-compliance during the initial stages of the service’s introduction.

HMRC have commented:

‘In recognition of the fact that the registration requirement is a new and unfamiliar obligation for many trustees, there will be no penalty for a first offence of failure to register or late registration of a trust unless that failure is shown to be due to deliberate behaviour on the part of the trustees. Where failures to register are due to deliberate behaviour on the part of the trustees, a £5,000 penalty may be charged per offence.’

To translate, this means that if HMRC becomes aware of a trust which has not been registered by the relevant deadline – either because that trust has been registered late or because HMRC has identified that trust’s existence by some other means – HMRC may first issue a warning letter to the trustee or agent.

If a warning letter is received and the trust still hasn’t been registered, then the trustee or agent should register it immediately.

If the trustee or agent fails to register the trust within the time period stated on the warning letter, or fails to explain why their trust shouldn’t have to be registered, a penalty may be issued to the lead trustee as this action could be viewed as deliberate non-compliance.

Penalties for this will be applied on a case-by-case basis, as per HMRC. Examples of the circumstances in which such a penalty might be issued include:

  • Continued failure to register a trust following repeated warnings
  • Providing details on a given trust that are deliberately inaccurate accompanied by continued failure to amend those details

Soft approach

HMRC have acknowledged that the requirement to register with the service is new and have accepted that some trustees will remain unaware of the obligation to register even after the deadline has passed, hence the soft approach to compliance in the first instance.

They have again reiterated that penalties to register, or late registration, will only be charged where it can be shown that non-compliance was deliberate and/or repeated warnings were ignored.

Please be mindful that trusts will have to register names, dates of birth, contact details and national insurance number of the lead trustee, nationality, and country of residence.

As always, if you would like any further information regarding the above, please feel free to contact our offices by email