HMRC's Trust Registration Service now live

Following a change in the law in September 2020, all express trusts (including unincorporated sports clubs), subject to a limited number of exemptions, are now required to register with HMRC Trust Registration Service (TRS).

Background

Under the Anti-Money Laundering Regulations 2020 (which apply throughout the UK) express trusts are required to register with the Trust Registration Service (TRS), even if they are inactive. The deadline for registrations for non-taxable trusts which are not exempt and were in existence on 6th October 2020 (which will include most asset owning unincorporated clubs) is 1st September 2022. Other newly created trusts will have until then or 90 days after creation if later to register.

Impact on unincorporated sports clubs:

Unincorporated associations such as some bowls clubs have no separate legal capacity so their property/assets e.g. freehold or leasehold land/equipment/bank account(s) must be held by individuals or by a legal entity on their behalf. Often within bowls clubs, property is held by club members willing to act as trustees. This is usually evidenced by a formal trust document. The question arises as to whether these bare trusts are required to register with TRS following the 2020 Regulations.

What is a Trust?

A Trust is an arrangement where money or properties is held by one party for the benefit of another party or for a charitable purpose. Many bowls clubs, particularly those which are run as unincorporated associations, operate under these arrangements, where the assets are held in the name of a few trustees but can be used by, and are for the benefit of, all members of the club. This is because an unincorporated club or association has no separate legal entity. Community clubs and associations are often structured as unincorporated associations, meaning that the association itself has no legal capacity.

What is an ‘Express Trust’?:

An express trust is any trust that is set up deliberately, in contrast to other types of trusts which may be set up automatically by operation of law. An unincorporated club where the trustees hold the club’s assets on trust, is a bare trust would therefore be an express trust, as it will have been set up deliberately by the club.

Is Registration Required?

If your Club is a registered Charity or Charitable trust, then you do not need to register the trust. However, HMRC have stated that this exclusion does not apply to clubs and associations that are not registered as a charity but are instead registered with HMRC as community amateur sports clubs (CASCs).

As a result, those unincorporated members’ clubs which have their property or assets held in the name of trustees should take action now and review the requirement to register with TRS. The deadline for registration was 1st September 2022 and clubs are encouraged to look at how their premises are held, and to register if they need to.

Implications for sports clubs:

Based on the above, unincorporated sports clubs which have their property/assets held by trustees should review the requirement to register with TRS. This might also provide a good opportunity to review the documentation supporting the trust arrangements and to ensure they are up to date. What action do clubs need to take in respect of the Trust Registration Service (TRS)?

1. Obtain information on how your club holds its premises and assets, and work out if there is an

express trust, and if so, who are the trustees.

2. Collect information about each of the trustees.

3. Register the trust on HMRC’s TRS system. This is often the hardest step so do not delay in

getting started.

An alternative to registering with the TRS would be for unincorporated sports clubs to consider incorporation. Check out our guidance on incorporation for sports clubs here.