UK: What is TRS registration and should my club do something about it?
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Determine if unincorporated associations need to take action before the deadline.
What is the Trust Registration Service (TRS)?
The TRS is HMRC’s online system which records details of trusts and requires annual updating. Bare trusts must register with the TRS by September 1, 2022.
Who is affected?
A trust is an arrangement in which one party holds money or property for or for the benefit of another party or parties (or for charitable purposes). Many unincorporated clubs and societies have these arrangements, where club assets are held in the name of a few directors but can be used and enjoyed by all club members. Regardless of whether the club has tax obligations or not, it will still need to register with the TRS.
Charitable trusts are specifically excluded from the registration requirement, but many clubs and societies are not charitable and therefore will not benefit from this exclusion.
Why is this important?
Failure to register by the deadline (or failure to update entries on an annual basis thereafter) may result in fines.
What do you need to do?
- Review your arrangements for any potential trusts – any situation where individuals hold property that is used for the benefit of others;
- Collecting information about the assets and property of trusts, including who owns the property and makes decisions about its use (usually referred to as trustees (or may also be referred to as a (management) committee, board or similar);
- Consider who else is involved in trust agreements. This includes beneficiaries (or a category of beneficiaries, such as “members of the club from time to time”), but may also include other individuals or organizations with influence or involvement in the trust (for example, individuals or organizations having the right to appoint trustees).
- Register for an Organization Government Gateway user ID (if you don’t already have one) – you will need this before you can register on the TRS.
- Record the details of the trust on the TRS and keep it updated on an annual basis. Your accountants should be able to help you.
What else should you consider?
There are potential risks for members, directors and officers of being an unincorporated club. It may be worth considering getting advice on ‘incorporation’ (creating a business structure and transferring assets and activities into it, to reduce risk).
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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