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New registration and record keeping requirements for express trust arrangements arising in corporate transactions

Are you a GP who owns property jointly with another party under a trust?

There are new obligations in the UK applying to express trusts arising in corporate transactions. 

Where an express trust exists, the owners/trustees of the land or property will be required to keep a record of their beneficial ownership (and in some cases register the trust with HMRC). 

Since 1 September 2022, under HMRC’s Trust Registration Service, more trusts will now be caught by and required to comply with registration and record keeping requirements. The newly extended obligations apply to both pre-existing trusts, as well as those formed on or after that date. 

The extension brings into scope non-taxable trusts that are either a UK express trust or a non-UK express trust that owns land or property in the UK or have a connection to the UK by virtue of either a business relationship or a UK resident trustee. Express trusts are regularly created in connection with a variety of business agreements where forms part of the corporate transaction, especially in GP partnerships, dentist practices and family arrangements. 

In view of the recently extended obligations it is important to review pre-existing trust arrangements to ensure that appropriate record keeping systems are in place and registrations are made (where this is required). Even where no registration is required, the record keeping requirements will still apply. Many ongoing business transactions will also include express trust arrangements in some form, so it is important to identify very early on as part of the deals going forward, whether these trusts need to be registered. 

At Weightmans, we understand that as busy practitioners your main focus is on clinical care. It is equally important to ensure that your business arrangements are in order and comply with HMRC’s requirements. Our specialist Trusts and Healthcare teams can provide advice on these recent changes and assist you with what steps should be taken now to ensure compliance.

If you would like to discuss matters in this article further please contact our dedicated trusts solicitors.

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