Registering Trusts with HMRC Trust Registration Service

The legislation on registering trusts with the HMRC Trust Registration Service (TRS) is changing. So, if you’re a trustee, administrator or beneficiary of a trust, it’s important you understand what the changes will mean and what action is required.

The TRS is a register of the beneficial ownership of trusts accessible by HMRC. It was first set up in 2017 and required trustees to register if their trust was liable to pay tax, such as income, capital gains or inheritance tax.

However, new rules introduced in October 2020 extended the scope to include all UK trusts and some non-UK trusts - whether or not they have a UK tax liability - to ensure they comply with anti-money laundering regulations. As such, the vast majority of trusts now need to be registered with HMRC, including the likes of discretionary trusts, protective property trusts, will trusts and pilot trusts with pensions.

There are some specific exclusions, such as charitable trusts, details of which can be found at www.gov.uk under the guidance on ‘register a trust as a trustee’. Here you will also find details on who should register the trust with HMRC, what you will need to register a trust and how to make changes to a registered trust in future.

A lead trustee must be nominated to register the trust and will be the main point of contact for HMRC. The deadline to register a trust which does not have a UK tax liability is 1st September 2022 or within 90 days of being created. New, non-taxable trusts created after 1st September 2022 must be registered within 90 days of creation.

"legislation is changing on the registering trusts"

Registration is via the gov.uk website, and to register a trust as a trustee; you will need an Organisation Government Gateway user ID and password. While we are unfortunately unable to register a trust on behalf of our clients, we are currently putting together a step-by-step guide to help simplify the process.

In the meantime, if you have any questions at all relating to trusts and registration, please contact us at: admin@lakesidefs.co.uk

Finance Q&A

Debt Consolidation

Consolidating numerous debts into just one pot can help save time, money and stress. However, it’s not entirely without its risks, as Lakeside Financial Adviser James Foster explains…

What is debt consolidation, and how does it work?

J: Consolidating debt is the process of switching some or all of your existing debt - incurred through loans, overdrafts and credit/store cards etc. - into one new loan. This means you will owe money to fewer lenders and have fewer direct debits going out each month. Often for clients, this is a case of extending their mortgage borrowing to consolidate their unsecured debts.

In what ways can this finance option help those in debt?

J: Mortgage borrowing tends to carry lower interest rates than unsecured borrowing and often has longer repayment terms available. This will generally result in lower repayments each month, making your finances more manageable and helping to reduce stress. Having more disposable income each month can also provide the opportunity to reassess your wider financial planning, freeing up the budget to help you protect your borrowing or your family or to save for your future.

And are there any risks to bear in mind?

J: While consolidating unsecured debt into a mortgage can result in lower monthly repayments with lower interest rates, if the borrowing is taken over a more extended period, you could end up paying more interest on the debt overall. Also, it’s important to remember that when securing debt against your home, the property is at risk if you don’t keep up with your repayments. It is important to take advice on these types of transactions as we can tailor your solution, so they are suitable for you.

How can you help clients wanting to explore debt consolidation, and are there any alternatives to consider?

J:It can be confusing when weighing up debt consolidation options, but meeting with a financial adviser can help clear up that confusion and address any concerns. We would look at the client’s individual situation and what they would like to achieve and then put together a financial plan to help get them there.

 

There may be alternative options, such as taking out a personal loan to pay off outstanding credit card debts, but we would explore that as part of our research and make a recommendation to the client of the best course of action to take.

For further information on debt consolidation, please contact: admin@lakesidefs.co.uk

Interest Rates on the Rise

The Bank of England has increased the base rate to 0.75% - the third interest hike in four months. Here, we look at why the base rate is rising and what it might mean for you.

What’s happened?
On Thursday, 3 February 2022, the Bank of England increased the base rate from 0.25% to 0.50%, then again on 17th March to 0.75%, putting rates at their highest level since March 2020.

What is the base rate, and why does this matter?
The base rate, set by the Bank of England’s Monetary Policy Committee, is the main driver of rates on mortgages and savings products in the UK. Changes in the base rate are usually likely to impact the cost of mortgages and return on savings. Generally, a higher base rate means banks and building societies are likely to increase the cost of mortgages, whilst savers can expect a slightly higher rate of interest on their savings. However, this isn’t always necessarily the case.

Why is the base rate increasing?
Base rate is increasing as a response to rising inflation. The Consumer Price Index (a measure of the costs of goods and services) hit 5.4% in January, well above the Bank of England target of 2%. By increasing the cost of borrowing, the Bank of England hopes to reduce rising inflation.

What does it mean for my existing mortgage?
Four out of five mortgages in the UK are currently fixed rates. This means that borrowers will not see an immediate increase in the cost of their mortgage. For borrowers on a variable rate mortgage, including a ‘Standard Variable Rate’ mortgage, rates are likely to rise, though this depends on the type of variable rate mortgage you have. For those on a tracker mortgage, which directly follow the Bank of England base rate, your rate is likely to increase by 0.25% immediately, and payments go up from next month. For those on a discounted rate, or Standard Variable Rate mortgage, your lender may decide to pass all, some, or none of the increase in rates on to you, but will write to you before your payments increase.

What does it mean for my mortgage offer?
Those customers with existing mortgage offers will not see rates increase for as long as the mortgage offer remains valid.

What should I do?
If you’d like to seek further guidance, our advisers can help you with understanding how the increase in base rate might impact you. They can also help explore options for remortgaging or switching rates and assist you in accessing support if you think you may encounter difficulties in paying your mortgage.

For more information about the base rate changes and what they could mean for you personally, please contact: admin@lakesidefs.co.uk

LAKESIDE TEAM Q&A - Adam Chambers

Lakeside Technical Specialist Adam Chambers has been part of the Lakeside team for more than a decade, initially working in client liaison and now specialising in pensions and investments. Here, he shares how his determined nature has seen him achieve both his work and personal goals.

When did you join the Lakeside team, how has your role changed over the years?
I first joined the team 12 years ago. I initially worked in paraplanning and client liaison but then started to do more on the financial advice side, working with clients one to one. Having done numerous further financial qualifications, I now work as a technical specialist across pensions and investments, as well as dealing with paraplanning and investment management.

Can you give us a brief overview of your job day to day?
Most of my time is spent putting cases together for the advisers and ensuring compliance is met for pensions and investments. In investment management, I also spend time on analytics and researching funds to make reactive changes to client investments and to build investment portfolios. Advisers will also come to me with any technical-related questions, as this is my area of expertise.

What do you enjoy most about it?
I genuinely enjoy it all but find the analytical and technical side of things particularly interesting and engaging.

Tell us about your main pastimes away from work…
I’m all about the outdoors. I’ve taken up various sports and competed in a number of fitness events over the years, including ultra marathons. Climbing is my top activity at present, taking me to peaks in Wales, the Lake District and Peak District. I’ve recently returned from an eight-day winter climbing trip to Ben Nevis in Scotland, with the snow, ice and wind making the climb all the more challenging.

And what are your top personality traits?
Given the regular sports activities I do and the numerous exams I’ve sat, I’d say I’m highly determined and self-motivated.

Can you share your personal and work goals for 2022?
My work goal for 2022 was to pass my Level 6 to obtain Chartered Status, which I achieved in January, getting the year off to a great start! My personal goal will be to climb Matterhorn - one of the highest summits in Europe - during a trip to the Alps later this year. I’m also planning to get back into cycling.

If you would like to discuss Lakeside’s pension and investment services, contact the office at admin@lakesidefs.co.uk

SERVICES

Just some services we offer at Lakeside

At Lakeside our clients benefit from bespoke financial solutions and pro-active, ongoing advice as well as access to exclusive products and services with extremely competitive pricing and charge caps. We offer the following services to all our customers:

  • Investments
  • Pensions
  • Insurance
  • Mortgages and Lending Options
  • Wills
  • Lasting Powers of Attorney

Visit the ‘News’ section of our website for further articles and updates on the portfolio of services that we offer.

 

First published on April 13th, 2022

The information provided above is believed to be correct at the time of publication and is provided for information purposes only, it does not constitute advice. Any reference to interest rates or growth rates are examples only and are for illustrative purposes only. You should seek independent financial advice before making any decisions about your finances and financial products. We accept no liability for loss as a result of any action taken based on the information on this page where appropriate independent financial advice is not taken from Lakeside FS Ltd.