Two-thirds of advisers concerned about TRS rule change

Two-thirds of advisers concerned about TRS rule change
Mark Lambert, head of onshore bond distribution at HSBC Life

Advisers are worried about their clients failing to register their trusts, a survey from HSBC Life has found.

According to the survey, 63 per cent of advisers said they were concerned about a failure to register.

The survey canvassed opinions from 206 UK-based financial advisers, 117 of whom have clients that are trustees or interested in trusts.

Approximately 27 per cent of advisers believed their clients did not know their responsibilities as trustees, while 8 per cent of advisers were unaware of the rule change.

Despite this, some 17 per cent of those surveyed were not planning to contact their clients to inform them to register their trusts before 1st September.

A change in rules means all express trusts except for those exempt must be registered with the Trust Registration Service by September 1 or risk a fine.

Head of onshore bond distribution at HSBC Life Mark Lambert said: “Advisers are clearly concerned about the risk of fines for clients failing to comply with the new TRS rules. 

“Where an onshore investment bond is used for inheritance tax and intergenerational planning, trusts are an important part of the solutions that advisers provide for their clients.”

While many advisers are concerned that clients will not register their trusts in time, some are not planning on informing their clients about the TRS rule change, HSBC Life said.

While the responsibility to register with the TRS lies with trustees, the input of advisers in getting their client’s registered is vital, according to Lambert.

However, HM Revenue & Customs may be more lenient for first offences, according to a tax specialist.

Talking to FTAdviser, Sharon Collier, tax director at Alexander & Co Chartered Accountants, said: “HMRC has advised the registration requirement is new and unfamiliar for many trustees.

"[Therefore], there will be no penalty for a first offence of failure to register or late registration, unless that failure is shown to be due to deliberate behaviour on the part of the trustees. 

“Where failure to register a trust is due to the deliberate behaviour of the trustees a £5,000 penalty can be charged for each offence.”

Collier added advisers should seek expert advice if they were unsure on how to support their clients and should provide clients with sufficient notice of the rule changes.


In an FTAdviser article written in July, Lambert said: “Advisers will hold most of the information trustees need to register, and its support will be invaluable to help clients to update their records and meet the registration deadline.”

Earlier this month, Helen Thornley, a technical officer at the Association of Taxation Technicians, commented in FTAdviser on the guidance provided by HMRC on the TRS rule change.

She said: “As it stands midsummer, guidance on many aspects of the new rules is still evolving and changing, leaving many advisers and trustees uncertain which trusts HMRC is expecting to be on the register in less than four weeks’ time.”