TRSM24040 - Types of trust that need to be registered: non-UK trusts entering a business relationship: contents: Steps to determine whether the business relationship condition applies

Trustees can use the following step-by-step guide to determine whether the business relationship condition is relevant to their trust, and if so, how to apply it.

Step 1: Is the trust a UK trust?

A trust is a UK trust if all the trustees are resident in the UK, or if there are a mixture of UK and non-UK resident trustees and the settlor was resident and domiciled in the UK at the time when the trust was set up or when the settlor added funds to the trust. See TRSM21010 for further information.

  • If the trust is a UK trust, there is no need to consider business relationships any further. See TRSM22010 for the registration conditions that may apply to UK trusts.
  • If the trust is a non-UK trust, proceed to Step 2.

Step 2: Is the trust a non-UK trust with no UK-resident trustees?

A trustee is UK-resident if they are UK-resident for the purposes of UK taxation, or for corporate trustees if the company is UK-resident. See TRSM21010 for further information.

  • If the trust has no UK-resident trustees, there is no need to consider business relationships any further. However, the trust may be required to register if the trustees acquire land in the UK (see TRSM22020) or if the trustees acquire a liability to UK taxation (see TRSM25010).
  • If the trust has one or more UK-resident trustees, proceed to Step 3.

Step 3: Have the trustees entered into a business, professional or commercial relationship with a UK relevant person?

‘Relevant persons’ include financial advisors, solicitors, accountants and others. See TRSM24020 for the full list of firms and organisations that are classed as relevant persons.

  • If the trustees have entered into such a relationship, proceed to Step 4.
  • If If the trustees have not entered into such a relationship, there is no business relationship to consider further. However, the trust may be required to register if the trustees acquire land in the UK (see TRSM22020) or if the trustees acquire a liability to UK taxation (see TRSM25010).

Step 4: Does the relationship have an ‘element of duration’?

A business relationship has an ‘element of duration’ if it goes beyond a short-lived, one-off transaction. Trustees should consult the relevant person if they are unsure if the relationship has or is likely to have an element of duration. See TRSM24030 for further information.

  • If the relationship does have an element of duration, proceed to Step 5.
  • If the relationship does not have an element of duration, the business relationship does not trigger the requirement to register. This step will need to be reconsidered if the relationship endures for a longer period than expected and thus acquires an element of duration. In the meantime, the trust may be required to register if the trustees acquire land in the UK (see TRSM22020) or if the trustees acquire a liability to UK taxation (see TRSM25010).

Step 5: The trust has entered into a business relationship that requires registration

If, following the steps above, trustees have arrived at Step 5, then the trustees have entered into a business relationship that means that the trust must register on TRS.

The requirement to register commences from the date that the business relationship is entered into, or at the point that the relationship acquires a sufficient element of duration (if this is at a later date). Trustees must register the trust on TRS within 90 days of this date.