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March 21, 2018

Penalties for Trust Registration Service Announced

As covered in our previous blog, the introduction of the new online Trust Registration Service (TRS) has been repeatedly delayed as a result of problems with the introduction of the new system.

On 5 March 2018, HMRC contacted the professional bodies outlining its policy for charging administrative penalties for the late registration of trusts and estates.

HMRC previously confirmed that while the normal deadline of the 31 January for existing trusts and estates would remain in place, it would not charge penalties where registration took place by 5 March 2018.


HMRC can impose the following penalties for late registration:

  • Up to three months late - £100 penalty
  • Three to six months late - £200 penalty
  • More than six months late - the higher of:
    1. 5% of the tax liability, or
    2. £300 penalty

'Tax liability' means the total tax in a relevant year including income tax, capital gains tax, inheritance tax, stamp duty land tax (SDLT), land and buildings transaction tax, and stamp duty reserve tax.

HMRC's Approach

HMRC have said they will not automatically charge penalties but will instead take a "pragmatic and risk based approach", particularly where trustees and their agents have made every reasonable effort to meet their obligations.

HMRC have also confirmed they will take into account the fact that this is the first year of the TRS and that recent adverse weather may have hampered efforts to comply with the new requirements.

Contact us today to discuss your tax requirements.
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