New trust registration rules
richallum
Administrator
What's everyone doing about this? I know we've got more than a year but the number of trusts that could be involved is huge, especially when it could be a straight forward life policy.
The rules say that a trust must be registered before giving advice for the first time but it's not clear what this means. I'm hoping for a life policy in trust it means if the policy pays out to the trust and then invested. I'm hoping it doesn't mean giving ongoing advice to a client about their policy/trust.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
Comments
Yikes! First time I've seen that, thanks @richallum
Some digging needed.
The way I read it Richard, my wife and I will need to register the express trusts that hold our life insurance policies before 20 March 2021. Obviously we're registering them as the respective trustee.
If I see an adviser, then as long as they aren't giving me advice on the trust (and they won't, because what advice is there to give on it while I'm alive?), they won't need to see evidence of registration.
If they are giving investment advice to trustees the register will need to be checked at the same time as AML for trustees is completed but also including the trust itself.
However, as there are late registration fees, presumably for the trustees(?), I'd be going through my entire client bank looking for trusts I'd advised be established and getting a mailshot out to the policyholder and/or trustee. I'd also want to get this checked at the first opportunity for new clients, as if they haven't registered I'd want to be telling them about it.
I'd add a question to the factfind - Are you the trustee on any trust created in the UK? 'Unknown' is not an acceptable response!
But before all that...this is a consultation. It might not happen *crosses fingers
Agree @benjaminfabi
Think I can clarify my comments a bit better as I was only coming at it from the adviser's point of view. My comments are still valid for that.
All new Trusts created after 1 April 2020 will need to register, irrespective of tax, and all existing Trusts will need to register, again irrespective of tax, by end March 2021.
The only Trusts that won't need to be registered are statutory ones. The tax qualification is the current regime.
Advisers will need proof from 10 March 2020 that the Trust has been registered before it can do business with it, but it's not clear what will happen with Trusts that haven't registered but are still within the deadline - I imagine you'd have to tell them to register, get proof and then give advice.
All advisers should be contacting their clients where's there's any form of trust IMO.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
I agree with this.
In reality, will this just be an extra line or 2 in an application and some small-print in the key features?
I think it will be that for new trusts but the existing trust will be the pain point.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
^
Pain point indeed. Thanks Richard. We've also passed this on to our CA Tax Team to make sure they were aware too.