TRSM27030 - Types of trust that need to be registered: contents: registrable estates: contents: Interaction between estates in administration and trusts

The issue of a trust created by will (see TRSM23020) is separate from the registration of an estate for the complex estate rules.

Example

John dies in England on 1 June 2022. He leaves his estate to his executors and trustees to hold on trust to pay his debts and funeral expenses and to divide the remainder between his wife and brother in equal shares absolutely. Under English law this creates a trust. As a trust created by will, the trustees are not required to register the trust immediately on John’s death.

  1. The estate is fully administered and all property in the residuary estate is distributed to his wife and brother by December 2023. As this is within two years of John’s death, there is no need for the trust to be registered.
  2. If on 1 June 2024 the estate is not fully administered or the estate has been fully administered but the property has not yet been transferred to John’s wife and brother then the trust needs to be registered on TRS.

As a bare trust, this would be a non-taxable trust and registered as such.

The registration of a trust created by will is separate from any registration of the estate. In the example above, the estate itself does not need to register unless the estate is classed as ‘complex’ (see TRSM27010).

If the estate is classed as ‘complex’ the executors will need to register as a complex estate for the administration period.

If the estate is not complex, registration of the estate is not required but if there is a tax liability then informal arrangements can be used – see TSEM7410.

The complex estate registration is for administration period tax purposes only, and is separate from registration under TRS, which requires registration as a trust rather than an estate, even if the trust covers or relates to the period of administration of the estate. Therefore, if there is a will trust which needs to be registered as well as a complex estate, the complex estate UTR (unique taxpayer reference) should not be used when registering the will trust.