You did not set up a trust. HMRC says you did, and so does the IRS

Figures relate to tax year 2025-26 (UK) · 2025 (US)

You bought a flat and put it in your name for your daughter to live in. You signed a declaration so the rent counts as your wife's rather than yours.

Neither arrangement felt like creating a trust. Nobody used the word and no solicitor drafted a deed with trustees in it.

Both may sit inside the UK trust registration regime anyway. For an American that registration does something else as well: it puts a dated record of a foreign trust in front of two tax authorities at once.

Key takeaways

• Trust registration covers most UK express trusts, taxed or not.
• Everyday family arrangements can be express trusts in law.
• The deadline is ninety days from creation or from a change.
• Several exclusions exist and they are narrower than people hope.
• An American settlor usually has US reporting on the same trust.
• Trust registration leaves a dated record of a foreign trust.
• Penalties are modest in Britain and severe in America.

What is trust registration?

An online register HMRC maintains of trusts and their people: settlors, trustees and beneficiaries. Since 2022 registration applies to most express trusts, not merely those with a tax liability. According to GOV.UK guidance on registering as a trustee, the duty falls on the trustees rather than the settlor.

The register is there to track money laundering, not to raise tax.

That is why so many untaxed set ups got pulled in.

What counts as an express trust?

Any set up you meant to create, where one person holds something for another. A written deed is not required, though one usually exists. What makes it express is that you meant to split legal title from benefit.

So a parent holding shares for a child qualifies.

One that arises only by law usually does not.

A worked example

Take an illustrative example. An American in Guildford buys a flat in 2023 and holds it for her adult son, who lives there and receives the rent from the spare room.

No solicitor mentioned trusts. The legal title sits in her name and the benefit belongs to him.

That is an express trust requiring UK trust registration within ninety days of creation. She registered nothing, because nobody told her.

On the American side she is the settlor of a foreign trust, with its own annual forms carrying far heavier penalties than anything HMRC charges.

What has to register and what does not

Which exclusions actually apply?

A defined list rather than a general exemption for small or simple trusts. Pension schemes, charitable trusts and pure protection policies sit outside. So do co-ownership trusts where the legal owners and the beneficiaries are exactly the same people.

That last one is narrower than it sounds.

Change the beneficial shares away from the legal ones and the exclusion falls away.

Does a declaration of trust trigger it?

Frequently, and this surprises couples who signed one purely to shift rental income. Where the beneficial split differs from the legal title, you have created an express trust. The exclusion for ordinary joint ownership no longer covers it.

Our guide to UK rental income and US tax covers the income side.

Plenty of accountants suggest these deeds and never mention the register.

How long do you have?

Ninety days from the date the trust was created, and ninety days from any later change in the details. A trust created in 2023 and never registered is already long past the deadline. HMRC accepts late registrations without drama in most cases.

Changes include a new trustee, a death, or a change of address.

Taxable trusts also make an annual declaration that the record remains correct.

What are the UK penalties?

Modest, deliberately so. HMRC's stated approach starts with a nudge letter rather than a charge, and a penalty of around £5,000 applies to deliberate failures. First time errors from people acting in good faith attract no penalty at all.

So the British risk is genuinely small.

The American risk attached to the same arrangement is not.

What does it mean for your US return?

A registrable express trust is usually a foreign trust for American purposes too. An American settlor who retains an interest faces annual reporting on the trust and on any distributions. Those forms carry percentage based penalties rather than flat ones.

Our guide to US settlors of UK trusts covers the reporting.

The two regimes ask different questions about the same arrangement.

Does registering expose the US gap?

It creates a dated record that somebody can point to later, which matters if the American forms were never filed. Nothing goes to the IRS direct. The trail simply exists, with a creation date on it.

That is an argument for fixing both sides together.

In our practice clients discover the American problem while doing the British one.

Should you register before filing in America?

Order matters less than doing both, though sorting the American side first is usually calmer. The disclosure routes there work best before anybody has contacted you. British registration carries no such condition.

Our guide to delinquent information returns covers the American catch up.

Doing one and ignoring the other is the outcome to avoid.

Who can see the register?

Not the general public, which reassures most families. HMRC shares data with law enforcement and with people who can demonstrate a legitimate interest in a particular trust. Trustees receive notice of such requests in many cases.

Children under eighteen get extra cover here.

The register is a compliance tool rather than a public document.

What about a bare trust for a child?

Bare trusts are registrable unless an exclusion applies, and most family ones do not qualify for any. Holding an investment account for a grandchild is the common case. The child owns the asset and somebody else holds the title.

Our guide to the junior ISA and US child tax covers the account types.

An American child adds a second layer of reporting on top.

Does a will trust need registering?

Only if it continues beyond two years from the death. Many estates use a trust that is wound up during administration, and those fall inside the exclusion. A life interest trust for a surviving spouse almost always continues and must register.

Our guide to US executors of UK estates covers administration.

Watch the two year point rather than the date of death.

What about a trust holding UK land from abroad?

Non-UK trusts register where they acquire British land or take on a business relationship with a British professional. So a family trust set up in America buying a London flat comes into scope. The nationality of the trustees is irrelevant.

Acquiring the land is the trigger rather than any tax liability.

That catches US families who buy a flat for a child at uni here.

What information does it want?

Names, dates of birth, nationalities and addresses for the settlor, every trustee and the beneficiaries, plus details of the assets. Classes of beneficiary can be described rather than named where individuals are not yet identified.

For an old family set up, gathering it takes longer than the filing does.

Start with whoever holds the original deed.

Who actually does the registering?

A trustee, through a government gateway account set up for the trust rather than for an individual. Agents can register on behalf of trustees with authorisation. The lead trustee becomes the point of contact afterwards.

Keep the gateway credentials somewhere the other trustees can reach them.

Losing access to the account is a common and tedious problem.

Does registration create a UK tax charge?

Not by itself, and that is worth saying plainly. The register records existence rather than liability. A trust with no income and no chargeable events registers and then does nothing further beyond keeping its details current.

Our guide to UK trust distributions and US tax covers when charges do arise.

Many Americans assume the opposite, and put it off out of fear.

What if the trust has ended?

You close the record rather than ignoring it, and a trust that ended before the rules began needs nothing. One that existed during the registration period and has since closed should have been registered and then closed on the system.

Tidying it up after the fact is easy enough.

The US forms for those years are still owed.

Does trust registration affect a mortgage?

Lenders increasingly ask about beneficial ownership, so a registered arrangement can surface during an application. That is a disclosure question rather than a tax one. Being able to produce the registration reference usually settles it quickly.

Conveyancers now raise trust registration as a standard enquiry on sales.

So an unregistered deal can hold up a sale.

What about a trust holding shares in your company?

An employee benefit trust or a family trust holding company shares falls squarely within the rules. Registration is required and the American reporting layers on top, because the trust holds an interest in a foreign company as well.

Our guide to GILTI for UK company owners covers the company side.

Two sets of American forms can apply to one structure.

Is professional help worth it?

For the British registration alone, often not, because the online process is straightforward once you have the details. The judgement call is which arrangements count as trusts at all, and that is where advice earns its keep.

The American analysis is where the real exposure sits.

In our practice most clients come for one and discover the other.

How long does trust registration take?

An hour or so online once the information is to hand. Gathering dates of birth and addresses for every beneficiary takes far longer, particularly for an older family arrangement where people have moved or died.

Allow a few weeks for the gathering and an afternoon for the filing.

Setting up the gateway account is the fiddliest step.

Does it change who pays the tax?

Not at all. Registration records the arrangement and leaves the underlying liabilities exactly where they were. A bare trust still taxes the beneficiary, and a discretionary trust still has its own rates and charges.

So nobody pays more British tax simply for registering.

The US side does not shift either.

What if you are a trustee but not the settlor?

The duty to register falls on the trustees, so you carry it even if somebody else set the trust up. An American trustee of a British family trust is on the hook for the British filing. The US forms follow a different test.

Those forms look at who funded the trust and who benefits from it.

So you may owe the British filing and no American one at all.

Does a nominee arrangement count?

Usually yes, because a nominee holds the legal title while somebody else keeps the benefit. Shares held through a nominee account by a broker are the common exception, since those sit outside the rules.

A private nominee set up between family members is a different thing.

Check who signed what before deciding either way.

Can you register more than one trust?

Each trust needs its own record, so a family with three separate arrangements files three times over. They can all sit under one gateway account, which at least keeps the admin in a single place. The information required is the same for each one.

Keep a simple list of which reference belongs to which deed.

Trustees change over the years and the list is what survives.

Does the trust need a UK bank account?

Not for the register itself, which records the arrangement rather than its banking. A trust with income usually wants one, so the money stays separate from the trustees own funds. Banks have become slow at opening them.

An American trustee makes that slower still, for the usual reporting reasons.

Our guide to bank account closures for Americans covers the wider squeeze.

What happens when a trustee dies?

The remaining trustees report the change within ninety days and appoint a replacement if the deed requires one. A sole trustee dying is messier, because somebody has to establish authority before anything can be filed.

Keep the deed somewhere the family can find it.

Lost deeds cause more trouble here than late filings do.

What records should you keep?

Keep the trust deed or declaration, the registration reference, the date of creation and a note of every change you reported. Those four things answer both authorities and survive a change of trustee.

Record the American forms filed alongside them.

Keep the file for the life of the trust and six years beyond it.

How to handle trust registration

1. List every arrangement where you hold property for somebody else.
2. Check each one against the trust registration exclusions.
3. Find the deed or declaration that created it.
4. Gather details for the settlor, trustees and beneficiaries.
5. Register through a gateway account held for the trust.
6. Assess the American reporting on the same arrangement.
7. File any outstanding US forms through the right route.
8. Diarise ninety days for reporting any future change.

Mistakes and penalties we see with trust registration

The first is assuming no tax means no duty. The register is about existence, not liability.

The second is treating a declaration of trust as mere paperwork. It frequently creates a registrable trust.

The third is registering in Britain and ignoring the American forms, which carry the serious penalties.

The fourth is missing the ninety day window after a change, which is as much a failure as never registering.

How US UK Tax Accountants helps

We go through a family's arrangements and identify which ones are trusts in law, which is rarely what people expect. Then we handle both registrations rather than one.

Where American forms are outstanding, we scope the catch up before anything is filed. Our trusts and estates service covers both sides together.

If you hold property or investments for somebody else, get in touch and we will tell you where you stand.

Last reviewed 19 October 2026. This article is general information and not personal tax advice. Trust law turns on the documents, so take advice on your own.