The UK’s trust compliance regime has become increasingly complex in recent years. While the regulatory push for transparency is clear, many trustees—often unintentionally—misunderstand or fail to meet their obligations. Even the most diligent trustee now faces a real risk of falling foul of the rules.

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This article highlights three key regimes that trustees need to navigate: the Trust Registration Service (TRS), the Automatic Exchange of Information (AEOI) framework, and Scotland’s Register of Persons Holding a Controlled Interest in Land (RCI). Each has its own rules and risks, but one message is consistent: non-compliance can be costly.

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1. TRS: More Than Just a Tax Register

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Launched in 2017 and expanded in 2020, the TRS is not just about tax—it’s about transparency. It captures information on who controls and benefits from UK express trusts, regardless of whether the trust has tax liabilities. Some non-UK trusts may also be caught.

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Common areas of confusion include:

• The TRS is focused on transparency of control and benefit, not just taxation.
• Trustees (or their agents) are responsible for registration and keeping the record up to date.
• A trust’s tax status affects the type and timing of reporting, but non-taxable trusts may still have to register.
• Overlaps with other compliance regimes, such as AEOI, can trigger additional obligations.

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2. AEOI: Navigating CRS and FATCA

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Under the AEOI framework, UK trustees may be required to report to HMRC if the trust holds financial accounts and has connections with overseas tax jurisdictions. This includes compliance with both the Common Reporting Standard (CRS) and the US-focused FATCA regime.

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Key pitfalls include:

• Misunderstanding whether a trust is reportable can lead to missed obligations.
• CRS focuses on tax residency, while FATCA targets US citizens and residents.
• Reporting is due by 31 May each year. Errors such as omitting controlling persons or misidentifying financial accounts can result in penalties.

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3. RCI: Scotland’s Additional Layer

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In Scotland, the RCI aims to make transparent who controls land and property. This can capture trusts where another party influences trustee decisions over property.

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Common issues include:

• Certain trusts may be subject to control by a third party, triggering an RCI obligation.
• As circumstances change, properties may move in or out of RCI scope.
• Unlike the TRS or AEOI, failure to comply with RCI obligations is a criminal offence in Scotland.

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Final Thoughts: Know the Rules, Avoid the Risk

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Trustees are now facing a compliance burden that rivals that of UK companies. Understanding what’s required—and when—is crucial. With so many overlapping regimes, working with experienced advisers is essential to avoid missteps and keep the trust on the right side of the law.

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