Under rules introduced this year via the European Union's Anti-money laundering directive, trusts must register with HM Revenue & Customs by January 2020.
Previously, only trusts with an immediate tax liability needed to be registered.
This could include trusts associated with products such as life policies, shareholder protection policies, whole-of-life policies and discounted gift trusts.
Non European Union-resident trusts that own UK property, or have a business relationship with professional firms, must also register.
The taxman has confirmed the ultimate responsibility for registering a trust is with the trustee, even if the trustee delegates the responsibility to the adviser.
Are there many people who take out a life policy then kill themselves to pass money to someone else as a money laundering exercise? Philip MiltonHowever Mr Milton said trustees often relied on advisers and argued this was a ridiculous requirement.
He said: "We may have sold a life policy years ago with a benefit in trust but we don't keep a register of those and nor do we have any obligation to do so thereafter.
"There is no payment for the provision of subsequent dialogue or anything either. It is all pretty ridiculous to be frank – money laundering provisions are absolutely important but this is extreme.
"Are there many people who take out a life policy then kill themselves to pass money to someone else as a money laundering exercise?"
Joan Foster, tax partner at RSM, agreed trustees may need to turn back to their advisers to figure out if they have a trust that needs to be registered.
She said: "The problem could be that if a trustee tries to do this, they may never have had any dealings with HMRC in relation to the trust in question. If that is the case then there are quite a few hoops to go through.
"I would also say that the system the trusts must be registered on has had problems in the past."
According to a spokesman for HMRC, anyone registering a trust for the first time must have an 'organisation' government gateway account.
A new account will need to be set up for each trust that needs to be registered and according to HMRC details of assets put into the trust, including the date they were put in the name, address, date of birth and National Insurance number (or passport number) of any individuals in the trust, must be stated.
Mr Milton's view is that HMRC do not understand the administrative challenge that advisers may face in complying with this requirement for clients that they may only have performed one task for.
A spokesman for HMRC said the legal responsibility for registering the trust rested with the trustees, and while an adviser may be a trustee, if they are not, then the matter does not concern them.
But Mr Milton said even if the adviser wasn't the trustee this is still a headache for firms such as his.
He said: "In many instances those ‘trustees’ will have forgotten about appointments too – we deal with this quite often on the maturity of an event, for example, having to turn detective to track-down those who may have been appointed some years ago.
"It just seems very unnecessary in that it is only at the ‘end’ that some action happens financially (and the beginning of course)."
He added his biggest concern around the issue was the uncertainty about where responsibility could lie.
david.thorpe@ft.com
