We are in the process of contacting clients that we know are affected in advance of the September 2022 deadline. However, over the last week or so, there has been much in the financial press about registering ‘trusts’ that many individuals wouldn’t even have thought of as trusts.

We therefore thought it might be useful to do a roundup of some of the more common types of trusts, and whether they require registration.

Child Trust Fund

Despite having the word ‘trust’ in the title, these are not trusts and do not need to be registered. The same applies to junior ISAs.

Trusts set up in your Will

These do not come into being until you die and therefore do not need registering at this stage. If they are still in existence two years after your death, they need to be registered at that point.

The slight exception to this is if you set up pilot trusts in your lifetime. If these were prior to 6 October 2020 and were only created with £100 or less, they do not need to be registered. If they were created after that date, or additional funds have been added then they do require registration.

Bare trusts

An example of a bare trust would be money held in a bank account or investment portfolio for your child.

So does this need to be registered?

In the first example, it doesn’t require registration as there is a specific exclusion for opening a bank account for a minor or person lacking mental capacity. However, if you are setting up an investment portfolio for a minor, there is no exclusion and therefore this would require registration.

Lifetime discretionary trusts

Discretionary trusts set up in lifetime would generally be ‘express’ trusts, i.e. trusts set up deliberately often by written deed, and these will require registration. If there are income generating assets in these trusts it is likely they have already been registered.

Life policies written in trust

In general, most life policies written in trust are covered by another of the exclusions. However, if the funds are not distributed within two years of death, these trusts will need registering.

The above are some of the more common types of trust, as you can imagine there are many more. As these rules bed in it is likely that there will also be further changes to the already overly complex rules.

The best advice is therefore; if you aren’t sure whether you need to register your ‘trust’ then please contact us for further advice.