We know trustees often juggle family life and duties. Registering and reporting a trust is no longer just tax paperwork. It is an ongoing duty that sits alongside other legal responsibilities.
Rules have broadened and deadlines are tight. Even with advisers involved, trustees are expected to act. Most trusts must now register on the Trust Registration Service and updates must be timely.
We wrote this guide for real-life trustees who want to get it right. It explains what good practice looks like: correct registration, accurate records, timely reporting and sensible governance habits.
Get it wrong and delays, stress and possible penalties can follow. Trustees can face personal liability if they do not take reasonable care. For a practical next step, see our short guide to register a trust as a trustee.
Key Takeaways
- Registration is often required even when no tax is due.
- Trustees carry personal responsibilities for records and reporting.
- Timely updates reduce the risk of penalties and stress.
- Simple governance habits prevent most common errors.
- Practical guidance helps trustees fulfil requirements with confidence.
What trust compliance means for UK trustees today
Every trustee needs a clear sense of what day‑to‑day trust duties look like.
In practice, this means keeping the trust visible where required and updating key details when things change. Registration has widened under anti‑money‑laundering regulations, so many arrangements now fall into scope even with no tax to pay.
Who does what
All trustees share obligations. Even when a professional adviser helps, trustees must check records and act with reasonable care.
The lead trustee usually manages online access and is the main point of contact. That role is practical, not a shield from personal liability.
Liability and a simple example
Trustees can be held accountable if deadlines are missed or details are ignored. It is a measured risk, not a cause for panic.
Imagine siblings running a family trust: one is organised, the other busy. If filings are late, both remain on the hook.
- Next, we look at what must be registered and maintained and the common trip‑wires to avoid.
hmrc trusts compliance essentials: what you must register, report and review
Clear, up-to-date files stop small admin slips turning into big problems. We outline the practical points every trustee should check and keep current.
Taxable and non-taxable in plain terms
Taxable means the trust can have UK tax to pay. That label brings extra filing duties.
Non-taxable often still needs registration. Since the 5MLD changes, many arrangements are within scope even with no tax due.
Core information to maintain
Make sure you can find key details quickly. Keep a single file with:
- Who the trustees are and contact details.
- Who the beneficiaries are and how they are identified.
- Clear descriptions of the assets and their values.
- Who holds control or influence over decisions.
Common mistakes that cause delays and penalties
Small gaps cause the biggest headaches. Typical errors include out-of-date beneficiary details, missing dates, vague asset descriptions and not recording trustee changes.
Trustees must not assume “no tax means no action”. Missing a deadline or relying entirely on an adviser can lead to penalties and extra work.
Mindset: treat the trust as a living file that needs light maintenance. Next, we explain TRS registration and how to avoid common submission errors.
How to register on the Trust Registration Service and avoid TRS errors
We walk trustees through the practical steps to get registration right and avoid common TRS mistakes.
When to register and limited exemptions
Most trusts created after 6 October 2020 need the trust registration service record. Exemptions are narrow and can be lost if the trust’s activity changes.
Tip: check the type trust and whether any tax liability applies before assuming you are exempt.
Deadlines and reporting changes
New trusts must register within 90 days of creation. Likewise, relevant changes must be reported within 90 days — the same 90‑day clock applies.
Remember, trustees must treat these clocks as admin deadlines, not optional tasks.
Annual declaration and using agents
Taxable trusts must file an annual declaration or return even when nothing changes. It is a simple confirmation rather than a full re‑submission.
Trustees can authorise agents to act on their behalf through the registration service. Use professional advice, but retain oversight and record authorisation carefully.
- Before you submit: verify names, dates and beneficiary categories.
- Summarise assets and record who controls decisions.
- Keep evidence on file in case you need to amend the register after changes.
“A short checklist before you click save prevents most TRS errors.”
Staying on top of HMRC trust reporting and tax return duties
Even modest activity in a family arrangement can mean a formal tax return is due. We explain what triggers a return and how to act fast if a Notice to File arrives.
When a tax return is mandatory, even if nothing is due
Trusts may need an annual tax return even when there is little income and no tax to pay. A notice from the tax office makes filing compulsory.
How to respond to a Notice to File when advisers are not alerted
Treat the letter as urgent. Open post promptly. Confirm who received the notice and tell your adviser immediately.
- Note the deadline and diarise the submission date.
- Confirm whether you or your agent will file the return.
- Keep a copy of correspondence and any authorisation for agents.
Record-keeping to support reporting: income, distributions and expenses
Good records make a return straightforward. Keep clear entries for income received, expenses paid and distributions to beneficiaries.
| Record type | Examples | Why it matters |
|---|---|---|
| Income | Rental receipts, bank interest statements | Shows taxable receipts and supports income declarations |
| Expenses | Repairs invoices, management fees | Allows allowable deductions and reduces tax where due |
| Distributions | Trust minutes, bank transfers to beneficiaries | Explains who received income and supports allocation on the return |
| Supporting documents | Statements, receipts, valuation notes | Evidence in case of queries or audits |
Think of the penalty pathway: missed notice → late return → result penalties. Simple habits prevent this.
“A modest rental and a small bank account still need tidy records to make any return quick and accurate.”
For practical help on appointing an agent, see our guidance on registering an agent. We also link ahead to the taxes trustees most commonly meet and the special reporting rules that often surprise people.
Paying the right taxes: income tax, Capital Gains Tax and Inheritance Tax reporting
Trust taxation is varied, not uniform. How income is treated depends on the type of arrangement and whether income is paid out or kept in. That distinction decides who pays income tax and when reporting is needed.
Income tax reporting for different types and income flows
Some types of arrangement mean beneficiaries are taxed on income when it is paid out. Others tax the arrangement itself on accumulated income.
Key action: identify the type trust and note whether income is distributed or retained. This decides rates, reporting and any tax liability.
Capital gains on UK residential property — 30‑day rule
Disposals of UK residential property create a tight deadline. Where gains arise, reporting and payment to the authorities must happen within 30 days of completion.
Common pitfalls are late login access, missing valuations and incomplete paperwork. Prepare a pre‑sale checklist: valuations, title details, completion date and agent authorisations.
Inheritance tax touchpoints and decade charges
Inheritance tax can matter at setup, during administration and on winding up. Forms and calculations may be needed at each stage.
Discretionary trusts also face ten‑year anniversary charges and possible exit charges. These dates are easy to miss and often trigger unexpected tax work.
| Event | What to check | Timescale |
|---|---|---|
| Income distributions | Who received income; record payments and documentation | Yearly; when paid |
| Property disposal | Valuation, completion date, payer details | Report and pay within 30 days |
| IHT on creation/winding up | Form completion, value calculations, liabilities | On event; file as required |
| Ten‑year and exit charges | Anniversary dates, calculations, beneficiary movements | Every 10 years and on relevant exits |
“Plan dates, keep valuations and document decisions — that simple habit saves time and cost.”
We can help you plan ahead and avoid common errors. For practical guidance on inheritance tax and planning, see our short guide to secure your family’s future.
Additional regimes trustees may need to consider beyond HMRC registration
If people or assets link abroad, extra reporting regimes can apply to your arrangement.
Automatic Exchange of Information: FATCA and CRS
AEOI (FATCA and the Common Reporting Standard) asks financial institutions to share data about accounts with overseas tax authorities.
In practice, a trust can be reportable if it holds bank accounts, investments or other reportable assets and has non‑UK connections.
How classifications change duties
A trust’s type, the people involved and the assets it holds determine whether reporting is needed.
Change a beneficiary, add overseas investments or alter the type of asset and the reporting requirements can change too.
Deadlines and Scotland’s land register
AEOI reporting follows the calendar year. Where required, reports are due by 31 May.
Separately, Scotland’s Register of Persons Holding a Controlling Interest in Land (RCI) can require reporting within 60 days for relevant property interests.
Penalties are real but avoidable: AEOI failure £300; incorrect AEOI filing £3,000; and TRS/RCI breaches can reach £5,000.
Simple habit: once a year review beneficiaries, assets and any cross‑border links. It keeps reporting clear and reduces the risk of penalties.
For practical detail on AEOI registration see our note on AEOI registration requirement.
Governance that prevents mistakes: documenting decisions, accounts and disclosures
Documenting who decided what and why makes future reporting straightforward and calm. Good governance makes planning easier and reduces stress for trustees and beneficiaries.
Using Deeds of Appointment for distributions and adding beneficiaries
Distributions should be formalised. Use a Deed of Appointment when you make payments or add a new beneficiary. That creates clear evidence and protects trustees if questions follow.
Trustee meeting minutes and written resolutions
Keep short minutes or written resolutions for investment choices, distributions and property matters.
- Note who voted and why.
- Record any professional advice relied on and attach it.
- Sign and date decisions so there is an audit trail.
Preparing annual trust accounts and managing beneficiary requests for information
Prepare tidy annual accounts as a snapshot of assets and activity. They are practical for planning and make returns and enquiries quicker.
Beneficiaries can request information. Decide what to share based on their interest in the trust and record your response.
“Clear records cut delays — good governance costs little but saves a great deal.”
Conclusion
A short, steady routine keeps a trust in order and your family protected.
Register when required and keep details current. File returns when asked and record key decisions as you go. These simple habits reduce the chance of penalties and personal liabilities.
Watch the deadlines: 90 days for TRS registration and updates, annual declarations for taxable arrangements, AEOI by 31 May and RCI within 60 days where relevant. Trustees may use advisers, but you remain responsible for the outcome.
Start today: check whether the trust is on the register, confirm the lead trustee’s access, review beneficiary and trustee details and set an annual compliance review date. For practical help on registration see registering a trust in Britain.