We know looking after a trust can feel daunting. We’ll explain, in plain English, what HMRC expects so you can protect your family and the assets you care for.
First, we set out the difference between everyday duties — like managing assets and following the trust deed — and the tax tasks of registering, reporting and paying. We show how to keep clear records and share the right information with beneficiaries.
Where there are multiple trustees, we advise nominating a principal acting trustee to handle tax administration. That step helps administration but doesn’t remove shared accountability.
We map the journey: read the trust deed, register on the Trust Registration Service, complete the trust’s tax return and meet key deadlines. For practical help, see our guide on how to register a trust and the official trustees’ tax page.
Key Takeaways
- Register the trust and file accurate returns to avoid penalties.
- Nominate a principal acting trustee to streamline tax tasks.
- Keep clear records and give beneficiaries requested information.
- Plan around main deadlines each tax year to reduce risk.
- Seek practical, family-focused guidance such as our registration guide for UK families: register a trust.
Understanding trustee duties and the trust deed in the UK
We start by explaining who holds a family’s assets and how the trust deed shapes what they can and cannot do.
Who holds the assets and how a trust works
A named person or organisation holds property or cash on behalf of beneficiaries. The held trust exists so the chosen people receive benefits when the deed allows it.
For example, inheritance money may be held until someone turns 25, but trustees can pay for university fees or a rental deposit earlier.
Fiduciary duty and avoiding conflicts
We must put beneficiaries first. That means staying impartial and not using trust assets for personal gain.
“Act as you would with your own affairs, but put the beneficiary’s needs first.”
Decisions, care and powers
Many deeds require unanimous decisions. The trust deed can change this and give specific powers to an acting lead person.
Trustees should take professional advice for investments, land and complex cases to meet the common law duty of care.
Managing assets day to day
Trust assets include money, bank accounts, investments, land and modern holdings like crypto. Keep clear records and log each decision.
| Asset | Daily task | Common risk |
|---|---|---|
| Cash and bank accounts | Reconcile statements monthly | Missing payments |
| Investments | Review performance and take advice | Poor returns |
| Land and property | Maintain, insure and record tenancy | Liability or disrepair |
| Modern holdings | Secure access and document value | Loss of keys or passwords |
Working with co-trustees works best when roles are clear. Nominating a principal acting trustee can streamline admin and tax tasks while keeping everyone informed. For practical steps on accessing funds, see our short guide to access a trust fund.
trustee responsibilities hmrc: registering and maintaining the Trust Registration Service
Before you register, check whether the trust must appear on the register and gather the key information. We keep this straightforward so you can act with confidence.
When a trust must register and who is in scope
The Trust Registration Service was introduced to improve transparency and reduce money‑laundering risks. Most UK express trusts must register unless specifically exempt. Certain non‑UK trusts also fall in scope when they have UK tax links, acquire UK land or form a new business relationship with a UK relevant person.
What information TRS requires
Prepare the trust name, date of creation, country of tax residence and place of administration. You will also need details of settlors, trustees and beneficiaries, and those with control or significant influence — often called beneficial owners.
How to register and practical tips
Registration is done online using a Government Gateway account. Where trusts have multiple people or complex assets held trust, it can help to use an agent. Have ID, dates of birth and addresses ready to avoid delays.
Deadlines, updates and annual checks
New trusts created on or after 1 September 2022 must be registered within 90 days of creation. Trustees must also update TRS details within 90 days of any changes.
If the trust has a tax liability, an annual declaration confirming TRS accuracy is due by 31 January after the end of the tax year and is recorded via the trust’s Self Assessment return.
Consequences of non‑compliance
Late registrations are usually handled sympathetically unless deliberate. Deliberate failures can attract penalties up to £5,000 per offence and, in serious cases, criminal sanctions for breaching anti‑money‑laundering rules.
| Topic | Required action | Deadline | Why it matters |
|---|---|---|---|
| New trust registration | Register on TRS | Within 90 days of creation (from sept 2022) | Keeps the register current and avoids penalties |
| Change of trustees or beneficiaries | Update TRS details | Within 90 days | Ensures accurate information for enquiries |
| Taxable trust annual check | Make annual declaration | By 31 January after tax year end | Links TRS to the tax return process |
| Serious non‑compliance | May incur penalties | Varies | Can lead to fines or criminal action |
For step‑by‑step guidance on registering a trust as a lead contact, see our short guide to register a trust.
How to report and pay trust taxes to HMRC each tax year
When the tax year ends, accurate records let us report income, capital gains and any inheritance tax events without last‑minute panic.
Income tax and other trust income must be recorded as the year runs. Capture bank interest, dividends and rental income. Keep dates, source documents and bank statements ready so the end tax year return is straightforward.
Capital gains and disposals
Track disposals of assets held in trust, with purchase costs, sale dates and valuations. That paper trail proves how gains are calculated and reduces query risk.
Inheritance tax and form IHT100
If an inheritance tax event occurs, we may need to file form IHT100. Don’t assume no death means no reporting—some lifetime transfers still trigger a return.
Filing the tax return and key deadlines
File the Trust and Estate Self Assessment after the end tax year. Paper SA900 is due by 31 October; electronic returns by 31 January. HMRC will confirm any tax due once you submit.
Paying what is owed
Pay by the stated deadline to avoid interest and late payment charges. That protects the estate’s money and keeps beneficiaries undisturbed.
Record keeping and beneficiary statements
Keep full accounts, statements and supporting evidence for at least six years. Provide beneficiaries, on request, a statement of income and tax paid using form R185. For pension lump sums paid after death, use R185 (LSDB) and notify the beneficiary within 30 days.
International reporting
Where there are overseas connections, check FATCA and CRS rules. Investment portfolios may also need an LEI for some EU transactions.
For practical inheritance tax guidance linked to property held in trust, see our short guide on protecting property in trust.
Conclusion
Here is a compact wrap-up to help you remember what matters most when looking after a trust estate.
Core points: protect the trust estate, follow the deed, keep clear records and meet tax filing obligations without last‑minute panic.
Three habits that help: register when required, update details on time and keep tidy paperwork so reporting stays straightforward.
Remember the key timings: the 90‑day rule for TRS updates and the annual 31 January touchpoint come round faster than you expect.
Trusts can hold many assets — from cash to land — and each asset brings its own admin and tax pressures. Plan ahead and act early.
If anything feels unclear, especially with cross‑border issues or complex family arrangements, get professional advice early. It usually saves time and cost later. For practical inheritance planning, see our guide on how trusts can avoid inheritance tax.