The Government have published their response to the 2024 ‘Improving the effectiveness of the Money Laundering Regulations’ consultation and we are delighted that common sense has finally prevailed in relation to the registration of trusts that only hold a nominal amount.
What are the planned changes?
The Government will introduce a new exemption for trusts that satisfy all the following:
The Trust/s
• are not liable for relevant UK taxes
• do not own or have an interest in UK land or property
• do not exceed £10,000 in the value of accumulated assets held
• do not have more than £5,000 in income per annum and
• do not have more than £2,000 of “appreciable” non-financial assets (art, jewellery, antiques etc)
This means that going forward, Trusts will not need to be registered while they are only holding the initial £10 note.
Trusts that receive lifetime gifts such as Protective Gifting Trusts or Bond Trusts will still be registrable. Once Trusts receive assets upon the death of the Settlor they will also need to be registered.
When will the changes come into force?
The published response states “we intend to publish the draft Statutory Instrument in the coming months for technical feedback, before laying in Parliament later this year if parliamentary time allows.” We therefore expect this to be October at the earliest, however, it may not be until April 2026
In the meantime, all £10 Trusts will still need to be registered within 90 days of creation.
What about £10 Trusts that have already been registered?
The de minimis exemption will not be retrospective and will only apply to new trusts created on or after the date that the exemption comes into force. Once a trust exceeds any of the above thresholds, the trust would need to be registered.
If a Trust has been registered, then Trustees should ensure that the details on the registration are kept up to date and Solidus can still support the Lead Trustee with our 24-month ongoing Trust Registration Service.
As Solidus lobbied for £10 Trusts to be exempt from registration in the initial legislation consultation in 2019, we are pleased that this unnecessary burden for Trustees will soon be removed.
