After years of frustration, trustees of small, non-taxpaying trusts will soon benefit from a long-overdue exemption from the UK’s Trust Registration Service (TRS). But there is a catch: the change will not apply retrospectively.
Under current rules, most UK express trusts, even those with no tax liability, must register with the TRS. That has included countless small, low-value arrangements never intended to trigger full compliance requirements.
What Is Changing?
HMRC has confirmed that small non-taxpaying trusts will, in future, be exempt from TRS registration provided they meet all of the following criteria:
- The trust holds assets worth £10,000 or less
- It generates less than £5,000 in annual income
- It holds no UK land or property
- It contains no more than £2,000 in non-financial assets (e.g. art, jewellery)
- It has no UK tax liability
The exemption is expected to be introduced via secondary legislation later this year or in early 2026.
Key Point: It Is Not Retrospective
Trusts that have already been registered under the current rules must remain registered, even if they would qualify for the new exemption going forward. There is no plan (as yet) to allow such trusts to be removed from the register. This is a forward-looking change only; a helpful reduction in the compliance burden for future trusts, but not a rollback for existing ones.
Why It Matters
This move will not affect the majority of standard trusts, which clearly continue to require registration. But it will prevent small family or administrative trusts, such as some bare trust and pilot trust structures, from being unnecessarily pulled into a regime designed to improve transparency and tackle abuse.
What Trustees Should Do Now
- Continue to register any trust that meets the current TRS criteria – the law has not yet changed.
- Watch for legislation – once the exemption is enacted, new small trusts may no longer need to register
- Seek advice – determining whether a trust falls within the exemption is not always straightforward, particularly where non-financial assets are involved.
Need Advice? Contact our Specialist Estate Planning Lawyers
Adam Swayne is a solicitor within our Asset Protection Group and is a dual qualified solicitor (Scotland and England/Wales). He specialises in Estate planning and Wills. If this article has raised any questions or you would like to discuss any issues covered here, then please complete our contact form, or call us on 0131 225 1200 to speak to one of our specialist estate planning lawyers.
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