As Jack has commented before, whilst professionals should know of the need to register on TRS, lay executors and trustees may have little, if any, knowledge of such a requirement and are likely to be the main victims of the penalty regime.
When drafting wills, the testator may be advised of the requirement, but will that ever be passed on to the named executors/trustees? How will they find out?
If drafting a settlement, it could be arguable that the drafter should not only opine on the need to register on TRS, but also effect registration. However, I am conscious that others on this forum have previously expressed the view that clients should look elsewhere for advice on tax/HMRC related issues.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
The Law Society’s Wills Protocol of July 2013 pre-dates TRS but contains in section 3-8 recommendations on what a solicitor should do about advice to the client on areas other than simply drafting the Will: devolution of assets not covered by the Will, family provision, IHT generally and APR/BPR, foreign property, and possible third party rights like estoppel.
The consistent message is:
(a) if the practice has the expertise make clear whether the charges include it; and
(b) if it does not, suggest the client take separate advice, assist the client in finding a suitable adviser if possible, but consider whether it is in the client’s best interest for the practice to cease to act in the preparation of the will.
Surely now TRS must be added to the above list. With a Will probably all that is necessary is to indicate that some action may need to be taken by the executors after the death of the will maker, although as Paul says this non-immediate message may not bear much fruit. But we do advise clients to review their wills in future. With instructions for a lifetime trust it would surely be negligent not to address TRS in view of the short deadline.
In response to Andrew, where the Will does not contain any genuine trusts, it is surely remiss to include the superfluous words “on trust” and thus oblige the executors to register the non-existent trust after 2 years just to give in to HMRC’s (apparent) view that these words have that effect (unless that view has changed by then!).
Hi, related question - the exemption from registration in Sch3A(7) applies to ‘a trust effected by will where - (a) the trust is holding only the property comprised in a person’s estate on death…’ Does this mean that the exemption won’t apply if the funds have been invested by the trustees? Or does it simply mean that no one else must have added to the trust? Thanks
I’m certainly interpreting it in the way you (@marciabanner69) do in your final sentence. The other interpretation taken too literally would invoke TRS even if all you did was encash some of the assets and held them on a solicitors’ client account!
Robin, is there a link to this correspondence please? I have searched the STEP website in vain and just in case CIOT’s as publications are sometimes joint
Jack Harper
I’m certainly interpreting it in the way you (@marciabanner69) do in your final sentence. The other interpretation taken too literally would invoke TRS even if all you did was encash some of the assets and held them on a solicitors’ client account!
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Hi, related question - the exemption from registration in Sch3A(7) applies to ‘a trust effected by will where - (a) the trust is holding only the property comprised in a person’s estate on death…’ Does this mean that the exemption won’t apply if the funds have been invested by the trustees? Or does it simply mean that no one else must have added to the trust? Thanks
Yes – it was highlighted in the correspondence between STEP and HMRC.
