TRSM70070 - Discrepancy reporting: contents: How to make a discrepancy report

Relevant Persons can make a discrepancy report here: make a discrepancy report.

Relevant Persons will generally need to make one of two types of discrepancy report:

  • where the trust is not registered, or
  • where the trust is not maintained or kept up to date. For example, the presence of a material discrepancy on the excerpt of the register (see TRSM70010)

The reporting process is anonymous, and the trustee will not be informed of the details of by whom or when the report was made.

The trust is not registered

It is the responsibility of the trustee to ensure that a registrable trust is registered on the Trust Registration Service (TRS). Trustees should consider TRSM23000, and if they believe that their trust is exempt from registration, the trust should formally document their decision and the basis on which that conclusion has been reached, for instance on the minutes of an appropriate meeting.

Trustees would not be penalised for failure to register if they have taken all reasonable steps to review the guidance and decided in good faith that they did not need to register.

Relevant Persons should give due regard under Regulation 31 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) (the MLRs) and the ‘duty to cease’ where due diligence cannot be properly carried out’. The duty to cease means that the Relevant Person ‘must not establish a Business Relationship or carry out a transaction with the customer otherwise than through a bank account’.

Relevant Persons dealing with an unregistered trust should discuss with the trustee(s) the exemption, as well as reviewing the guidance at TRSM23000, then using their appropriate professional judgement, decide whether they feel reasonably satisfied that the trust is not required to register. If the Relevant Person does not feel reasonably satisfied, then a material discrepancy report should be made (see TRSM70030).

Where a Relevant Person accepts that a trust is exempt from registration, HMRC recommends that the Relevant Person formally record the decision.

Relevant Persons would not be penalised for failure to report an unregistered trust if they have taken all reasonable steps to review the MLRs and the guidance and decided in good faith that the trust did not need to register.

If Relevant Persons:

  • believe that the trust is not registered but should be registered
  • are uncertain that the trust qualifies for an exemption
  • are aware that the trust has failed to register the trust contrary to their professional guidance

then a material discrepancy report should be made.

The report should include as much information as possible regarding the trust, particularly the contact details of the person representing the trust and/or the trustee themselves.

The trust is not maintained or kept up to date

If Relevant Persons believe that the trust information is not maintained or kept up to date, the discrepancy report will need to include as much detail as possible regarding the trust and the material discrepancy. This should include the discrepancy description, details of why the Relevant Persons believe it is a material discrepancy and copies of any documentation that corroborates the Relevant Persons’ report.

For each piece of information that has not been maintained or kept up to date, the report should include: the up-to-date information; the date this change of information took effect from; and the date the trustees became aware of this change.

Some discrepancies may arise because of a change in beneficial owners that has not been updated on TRS. Other discrepancies may arise because the details of an existing beneficial owner may have changed, for example, a change to a married name.

Information required when making a material discrepancy report

When making a discrepancy report, details of the person making the report (the reporter) will be required. This includes their name, company details, basic contact information, and the services provided by the reporter or their company / firm. This information is required so HMRC can determine whether the reporters are Relevant Persons (and therefore legally required to make a report) and follow up any reports for further information if required.

In addition to this, the report will require any relevant information that the Relevant Persons hold about the trust, such as the name and contact details of the trust, the trustee / agent representing the trust. Details such as the UTR or URN and e-mail and postal addresses are helpful in identifying the trust in question.

If reporting a material discrepancy that is reasonably considered to be the result of Money Laundering or Terrorist Financing, then Relevant Persons should submit any additional information that would support their belief i.e., detection of unusual or suspicious transactions.

In addition to the obligation to submit a discrepancy report we would also remind Relevant Persons of their additional obligations, including to consider whether a Suspicious Activity Report should be submitted to the United Kingdom Financial Intelligence Unit (UKFIU).

For guidance on submitting a SAR please see: Tell us about suspicious activity that may be linked to money laundering - GOV.UK

One trust per discrepancy report

A separate discrepancy report must be made for each trust by Relevant Persons. Multiple discrepancies can be included on the same discrepancy report, provided they relate to the same trust.

The same discrepancy report cannot be used to report discrepancies with multiple trusts.

For sub-fund settlements see guidance in TRSM10030.

After the discrepancy report is submitted

HMRC will issue an automated acknowledgement to organisations making an electronic discrepancy report, this will include a reference for the Relevant Persons’ records.

HMRC will check its records and if it is found that the reported material discrepancy needs to be corrected, it may contact trustees to update their data on TRS. Relevant Persons will not be updated on the outcome of any discrepancy report they make to HMRC.