Considering whether unincorporated associations need to take action before the deadline.
What is the Trust Registration Service (TRS)?
The TRS is HMRC's online system which records details of trusts and requires updating annually. Bare trusts must register with the TRS by 1 September 2022.
Who is affected?
A trust is an arrangement where one party holds money or property for, or for the benefit of, another party or parties (or for a charitable purpose). Many unincorporated clubs and societies have these arrangements, where the assets of the club are held in the name of a few trustees but can be used and enjoyed by all of the members of the club. It doesn't matter whether the club has any tax liabilities or not – it will still be required to register with the TRS.
Charitable trusts are specifically excluded from the requirement to register, but many clubs and societies are not charitable and therefore will not benefit from this exclusion.
Why does it matter?
Failure to register by the deadline (or failure to update entries on an annual basis thereafter) can incur fines.
What do you need to do?
- Review your arrangements for any potential trust(s) – any situation where individuals hold property which is used for the benefit of others;
- Gather information about the assets and property of the trusts, including who holds the property and makes decisions about its use (usually referred to as the trustees (or may also be referred to as the (management) committee, council or similar);
- Consider who else is involved in the trust arrangements. This includes the beneficiaries (or a class of beneficiaries, such as ‘the members of the club from time to time') but may also include other individuals or organisations with influence over or involvement in the trust (for example, individuals or organisations having the right to appoint trustees).
- Register for a Organisation Government Gateway User ID (if you do not already have one) – you will need this before you can register on the TRS.
- Register details of the trust on the TRS and keep it up to date on annual basis. Your accountants should be able to help with this.
What else should you consider?
There are potentially risks to members, trustees and officers of being an unincorporated club. It may be worth considering getting advice on ‘incorporating' (setting up a corporate structure and transferring assets and activities to it, to reduce the risk).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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