Registering trusts: an update

By Vasiliki Carson

In July 2022 I wrote a blog called "Registering trusts", ahead of the 1 September 2022 deadline for registering trusts on HMRC's then newly expanded Trust Registration Service (TRS). Four years on, the register is firmly established, the rules have evolved, and one misconception in particular keeps surfacing in conversations with fund managers and property investors. So an update is overdue.

The register is about money laundering, not tax

The most important point to understand about the TRS is what it is for. It is an anti-money laundering measure, created under the UK's Money Laundering Regulations, designed to give HMRC and law enforcement visibility of who sits behind trust structures: the settlor, the trustees, the beneficiaries, and anyone with control.

It is not a tax register. This matters because many trustees assume that if their trust pays no tax, it has nothing to register. That is not how the rules work. A trust can be entirely exempt from tax and still be required to register on the TRS, because the register is asking a different question. Tax rules ask "who owes the Exchequer money?" The TRS asks "who is behind this structure?" Think of it like a charity: being exempt from corporation tax does not excuse it from filing accounts at Companies House. Transparency obligations and tax liabilities run on separate tracks.

What has changed since 2022

Two developments are worth highlighting.

First, in January 2023 HMRC clarified its guidance on unit trusts. Only UK authorised unit trusts with no UK tax liability benefit from an exemption from registration. There is no equivalent exclusion for unauthorised unit trusts. This brought many structures into scope that were previously assumed to be outside it, including offshore vehicles such as Jersey and Guernsey property unit trusts where they have a relevant UK tax liability or acquired UK land on or after 6 October 2020.

Second, the rules were updated again by regulations that came into force on 30 June 2026. These bring certain additional trusts within scope, particularly non-UK trusts holding UK property, while easing the burden elsewhere: a new exclusion has been introduced for small, low-value trusts, and a trust is no longer required to register solely because it has a liability to stamp duty reserve tax.

What this means for Property Unit Trusts

This is where the tax and AML distinction really bites. Property unit trusts structured as unauthorised unit trusts come in two tax flavours: exempt (EPUTs, where all the unit holders are exempt investors such as registered pension schemes and charities) and non-exempt. It is tempting to assume that an "exempt" property unit trust is also exempt from the trust register. It is not.

The exempt label is a tax classification. It means the trust itself does not suffer tax because of who its investors are. It says nothing about the TRS. A UK-resident EPUT is a UK express trust, and following HMRC's 2023 clarification there is no carve-out for unauthorised unit trusts of any kind. Both exempt and non-exempt property unit trusts will generally need to be registered.

There is one quirk on the non-exempt side. Corporation tax, which non-exempt unauthorised unit trusts pay, is not one of the taxes that makes a trust a "taxable relevant trust" for TRS purposes. Trustees in that position may therefore register with a lighter disclosure burden than a trust liable to income tax or capital gains tax. But they register nonetheless.

The stakes have risen

When the register was new, HMRC took a light-touch approach to enforcement. That grace period has passed. Penalties of up to £5,000 can now be applied for failing to register a reportable trust or to keep its details up to date, and firms subject to the Money Laundering Regulations are required to check the register when taking on new trust clients and to report discrepancies. An unregistered trust is increasingly a trust that struggles to open bank accounts, complete property transactions, or pass onboarding checks.

The practical takeaway

If you are a trustee of, or an investor in, a property unit trust or any other trust structure, do not rely on tax exemption as a reason not to register. Check the position, and if the trust should be on the register but is not, correct it promptly. As always, deadlines and detailed requirements depend on when the trust was created and when any liability arose, so please speak to your tax adviser or trustee before taking action.

This article is for general information only and does not constitute tax, legal or investment advice. Tax treatment depends on individual circumstances and is subject to change.