We previously reported on the introduction of the Trust Registration Service in 2017 and, in particular, how this would likely impact the commercial real estate sector. The Fifth Money Laundering Directive (MLD5), which came into effect on 6 October 2020, has significantly broadened the scope of the obligations to register. In this article, we have detailed the changes that have been made and the practical implications for UK property-owning structures.


As previously detailed in our HSF bulletin, the Trust Registration Service was opened in 2017 and imposed various registration and reporting requirements on trusts incurring UK tax. HMRC issued deadlines in this respect and the penalties for failure to comply were to follow.

In terms of the real estate world, we noted that the registration requirements may principally impact trustees of unit trusts (such as Jersey or Guernsey Property Unit Trusts) that incur SDLT on real estate acquisitions or nominee/bare trustees who incur SDLT on grants of new leases. Offshore trusts which are subject to Non Resident CGT on disposals may also be required to register.

What is new?

HMRC has expanded the scope of what trusts are required to register with the TRS such that all express trusts (save for a few limited exceptions) are required to register irrespective of whether they have a liability for UK tax.

What trusts are required to register?

The new regulations will affect, subject to limited exclusions:

  • all UK resident express trusts and UK resident trusts incurring UK taxes on trust income or assets directly held by the trust;
  • non-UK trusts, where a UK tax liability is triggered in respect of UK source income or UK assets held directly by the trust;or
  • non- UK express trusts;
    • which acquire an interest in UK land; or
    • with at least one UK resident trustee that enters into a business relationship with certain categories of businesses (including financial institutions, accountants, lawyers, trust or company service providers and estate agents, amongst others)
    • Non-UK express trusts under the third bullet point are subject to a number of exclusions which may be relevant in the real estate context including in respect of pension funds, co-ownership structures, temporary trusts pending legal transfer of title, amongst others.

What does this mean in practical terms for real estate structures?

The obligation to register with the UK Trust Registration Service will likely bite on common real estate holding structures, in particular Jersey or Guernsey Property Unit Trusts or nominee/bare trustees that directly hold UK property. Where a trust exists in a UK property holding structure, we would expect that advice is sought as to whether the trust is obliged (if it isn’t already) to register with the UK Trust Registration Service.

Whilst the legislation provides that affected trusts must register by 10 March 2022, HMRC has announced that, due to technical upgrades required, this deadline has been extended to 1 September 2022 (for trusts in existence on or after 6 October 2020).

What are the implications for non-compliance?

Details of the penalty regime have not been published yet. During consultation, HMRC suggested that they do not expect to raise fines immediately for non-compliance and it is likely that failures to register will result first in a notification being sent to the trustee. Further failure thereafter to register may result in fines.

For further information please contact:

Casey Dalton
Casey Dalton
Partner, Real Estate Tax, London
+44 20 7466 2630
Alex Wright
Alex Wright
Senior Associate, Corporate Real Estate, London
+44 20 7466 7454