TRS - a business opportunity?

Trusts Discussion
1

Good morning

I’m just getting my head round the TRS requirements.

Most of the Trusts I draft are IPDI Will Trusts where adult children are the remaindermen AND are Trustees with the surviving spouse.

That so, my understanding is that there is a requirement to register the Will Trust within 90 days of the two year anniversary of death.

Had the Trustees been different people to the remaindermen there would also be a requirement to register the trust as a Property Trust as well so registration twice over.

Am I correct with my understanding?

Now on to registration itself. A local solicitor’s firm has given all registration work to a firm of accountants. Are they not missing a trick? How difficult is it to register the trusts? Is it not just a case of creating a government gateway and getting all of the necessary information from the client? The accountant’s firm charges around £575 plus VAT on the basis that it takes about 4 to 5 hours of their time? Does it really take that long? I’d be interested to hear how many of you are doing this, and how long it takes.

Many thanks
Deborah

2

Wow - we only charge £75 plus VAT!

The trusts you are talking about - are the life interest trusts over the marital home to allow surviving spouse to continue living, with children as remaindermen? If trustees and remaindermen are the same then it is my understanding that there is no requirement to register. TRSM23050 - Types of trust that need to be registered: contents: excluded express trusts: contents: property ownership - HMRC internal manual - GOV.UK (www.gov.uk)

Lucy Orrow CTA TEP
Lambert Chapman LLP

3

Hi Deborah

You need an HMRC Agent Services account which takes a while to set up (depending on how long HMRC take to deal with it). You can’t just set it up on line. I charge less than £575 plus VAT however realistically I probably should charge more. A chunk of time goes on setting up the client (as usual) and of course that time is always disproportionately large when you are only doing a small piece of work. If the client can provide all the information then the TRS is fairly straightforward although the digital handshake can take a while if clients are not IT savvy. The problems come when you have many named beneficiaries who don’t even know the trust exists and are unlikely ever to benefit and yet are now being asked to provide a load of personal information. This seems to happen more where you have a DoV made by someone with no children of their own so they (understandably) include all their friends and their children (one had about 15 named beneficiaries). Having trustees and beneficiaries with no email address also adds to costs as more has to be done by post. Also HMRC “clarified” a while ago that if you have a class of beneficiaries, eg my grandchildren, you now have to give full details of all where it is possible to ascertain the members of the class, not just those who have had a distribution.

All in all, looking at the above, I think the accountants are probably being realistic, although I think there are many out there doing it for less.

Sara

Sara Spencer | Trust Manager

www.trustandestate.co.uk

Sara Spencer Ltd, 8 Kingsway, Harrogate, HG1 5NQ

07952 651881 | 01423 524114

Sara.spencer@trustandestate.co.uk

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4

Hi Lucy

I think the HMRC guidance you show refers to trustees and beneficiaries being the same where people have jointly purchased a property, ie the legal and beneficial ownership are the same. In an IPDI the widow say has the beneficial interest whilst alive, not the remaindermen who as trustees in your example have only legal ownership at that time.

Happy to hear if I am wrong.

Sara

Sara Spencer | Trust Manager

www.trustandestate.co.uk

Sara Spencer Ltd, 8 Kingsway, Harrogate, HG1 5NQ

07952 651881 | 01423 524114

Sara.spencer@trustandestate.co.uk

Privacy Notice - details of our legal basis for processing your information, retention period for data held, security of your data, your rights under the General Data Protection Regulations (GDPR) including the right to complain can be found in our full Privacy notice

This email and the information contained in it and in any attachments are confidential and may be privileged. If you have received this email in error please notify us immediately. If you are not the intended recipient, you are not authorized to, and must not use, disclose, copy, distribute, retain or rely on this email or any part of it.

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Sara Spencer Ltd is a company registered in England, registration number 12304408, registered office 8 Kingsway, Harrogate, HG1 5NQ

1 Like
5

I register all my own trusts on the basis that they are not difficult to register and an accountant’s firm would undoubtedly overcharge, and might make mistakes. These solicitors must have so much work it’s untrue.

Julian Cohen

Simons Rodkin

6

Hi Julien

I am not sure why you say “an accountant’s firm would undoubtedly overcharge”. Many people see solicitors, and indeed everyone who provides them with a service they would rather not have to pay for, as overcharging.

I am neither an accountant nor a lawyer, but wouldn’t accuse either of overcharging. And it is always open for clients to say no and go elsewhere.

Sara

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2 Likes
7

Sadly these IPDI trusts do need to be registered Lucy yes.

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8

Sara, thanks for your response. As a non practising solicitor would I be able to set up an Agent Services Account?

What is the information I need to register the trust, the trustees and each beneficiary in order to register? Is it basic information such as full names, dates of birth, addresses, NI numbers etc? Where can I find a list of what I need?

Is there a fee payable to HMRC to register the trust or is the only fee the one payable to the agent?

Many thanks for your help.

Deborah

9

My understanding is that lay trustees can register the trust themselves without using an agent? In which case an Agent Services Account wouldn’t be necessary.

When I apply for Probate for a client I complete a personal application, so I just do the work for the client as if I were the client if that makes sense and there is no mention of me on the forms. I presume I can do something similar as far as trust registration is concerned.

10

With the client’s full name and email address I can set up a Government Gateway user ID and password for them and then register the trust for them. That is what I’m thinking. Does anyone do the same?

I’ve found the list of what I need for all trustees, beneficiaries, the deceased etc. It’s all on Gov.uk

With all of the information to hand can anyone give me an idea of how long it takes to complete the form?

Many thanks
Kind regards
Deborah

11

Hi Deborah

You mention you are a non practicing solicitor. but also mention applying for probate for clients and registering trusts for clients so it seems you are in practice in some way.

If you are registering a trust on behalf of a client, rather than you being a trustee of the trust and registering it for yourself and your co trustees, you should be using an Agent Services Account https://www.gov.uk/guidance/register-your-clients-trust#how-to-register .

To get an Agent Services Account you need to do this https://www.gov.uk/guidance/get-an-hmrc-agent-services-account.

So yes, you can set up a gateway for each of your trust clients as if you were a trustee, but should you? Not as far as I understand.

Re Probate, I don’t know about doing that on behalf of a client as I don’t do it, but you mention you do it as it you were the client rather than on their behalf so you might want to check that too.

Good luck

Sara

Sara Spencer | Trust Manager

www.trustandestate.co.uk

Sara Spencer Ltd, 8 Kingsway, Harrogate, HG1 5NQ

07952 651881 | 01423 524114

Sara.spencer@trustandestate.co.uk

Privacy Notice - details of our legal basis for processing your information, retention period for data held, security of your data, your rights under the General Data Protection Regulations (GDPR) including the right to complain can be found in our full Privacy notice

This email and the information contained in it and in any attachments are confidential and may be privileged. If you have received this email in error please notify us immediately. If you are not the intended recipient, you are not authorized to, and must not use, disclose, copy, distribute, retain or rely on this email or any part of it.

Please note that whilst we try to ensure that attachments are virus-free, we cannot accept responsibility for situations where this is not the case.

Any information in this email is advice from the business and not the sender.

Sara Spencer Ltd is a company registered in England, registration number 12304408, registered office 8 Kingsway, Harrogate, HG1 5NQ

12

I believe that to act as an agent for trustees, a firm needs to be an “accountancy service provider” (Register with HMRC to use an agent services account - GOV.UK). Under the money laundering regs, this includes: auditors, accountants, tax advisers/consultants, payroll agents who provide accountancy/tax services, customs practitioners. This likely excludes many financial advisers and solicitors.

In terms of cost, £575+VAT sounds steep. Initial registration for simple trusts should be fairly straightforward, although some trusts will obviously be more complex than others depending on number of beneficiaries etc.

13

Re the accountants charging £575 plus VAT, there is always the possibility that they don’t really want the work. As I have said before, clients can always say no.

The time consuming parts are setting up the client (for a relatively small job) and then gathering the info. Inputting it is the easy part.

I would also say, many think the TRS is simple and it can be, but I have seen quite a few get it wrong including eg where trust made under DoV, and not showing all the beneficiaries that they should.

The ATT’s notes written following consultations with HMRC on areas lacking clarity are very good and available to everyone, not just ATT members. Here is one of their notes https://www.att.org.uk/how-update-trust-register

Sara

Sara Spencer | Trust Manager

www.trustandestate.co.uk

Sara Spencer Ltd, 8 Kingsway, Harrogate, HG1 5NQ

07952 651881 | 01423 524114

Sara.spencer@trustandestate.co.uk

Privacy Notice - details of our legal basis for processing your information, retention period for data held, security of your data, your rights under the General Data Protection Regulations (GDPR) including the right to complain can be found in our full Privacy notice

This email and the information contained in it and in any attachments are confidential and may be privileged. If you have received this email in error please notify us immediately. If you are not the intended recipient, you are not authorized to, and must not use, disclose, copy, distribute, retain or rely on this email or any part of it.

Please note that whilst we try to ensure that attachments are virus-free, we cannot accept responsibility for situations where this is not the case.

Any information in this email is advice from the business and not the sender.

Sara Spencer Ltd is a company registered in England, registration number 12304408, registered office 8 Kingsway, Harrogate, HG1 5NQ

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14

To be an ‘agent’ you either need to be registered for Anti-Money Laundering (AML) through your regulatory body (if on the AML approved list) or otherwise you need to be supervised by HMRC for an annual fee. You also need to understand trust tax to a fairly high level as there are questions about any tax owed by the trust.

15

We are the probate arm of a chartered accountants practice in Sussex. We have a large trusts tax team and have two of our team who spend a good deal of their time registering trusts for law firms. Standard charge is £300 plus VAT

Michael McCabe
Heath Square Private Client Ltd

16

I look forward to our chat this week all about this and CGT. Kind Regards - Chris Bell (Rugby Wills)

17

Some feedback since my initial post.

I completed my first TRS registration of a non taxable trust last week. I basically sat with my client the lead trustee and assisted her through the process. We were able to set up a government gateway account for her as lead trustee and completed the registration process very easily. She said herself that she would have struggled doing it herself with no assistance. So this is the service that I’ve decided I’m going to provide and providing the client has all of the information ready for me I’m going to charge about £150.

18

Sounds good to me. I shall be doing similar.

Richard C. Bishop

19

I am a tax advisor, not a solicitor, and as with a firm of accountants found the references to fees interesting.
For an existing client we find about £300 plus VAT for a registration is about right, as someone said above it is the faff of the digital handshake, etc to get future access to the TRS that can take the time and trouble.

If it is a one off for a non taxable trust that is a new client the fees are from about £350 to £450 plus VAT as we have to recover set up costs. This includes our access to the TRS for future updates and annual declarations (when taxable trusts are involved).