HMRC can charge a fixed penalty of £5,000 where trustees fail to register a trust on the Trust Registration Service or fail to keep its details up to date. In practice it does not charge automatically for a first failure: it writes to the trustee or agent with a time limit, and only charges if the trust is still not registered or updated within that limit. The penalty is a civil penalty under the Money Laundering Regulations 2017, not a tax penalty, and it can be reviewed and appealed.

Where does the penalty come from?

The duty to register sits in regulations 44, 45 and 45ZA of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. HMRC’s Trust Registration Service Manual at TRSM80010 confirms that penalties for failing to register or keep information up to date are imposed under Part 9 of those regulations.

Regulation 76 lets HMRC, as a designated supervisory authority, impose “a penalty of such amount as it considers appropriate” on a person who has contravened a relevant requirement, and to publish a statement censuring them. “Appropriate” means effective, proportionate and dissuasive. Schedule 6 lists the relevant requirements, and paragraph 9 includes the trustee obligations in regulation 44, the register duties in regulation 45(2), (9) and (10A) to (10I), and regulation 45ZA(3) to (7) for additional types of trust.

HMRC’s published policy is a fixed amount. Its GOV.UK guidance says it can charge a fixed penalty of £5,000 if a trustee fails to register or keep the information up to date within the time limit, and that no interest is charged on penalties.

When will HMRC not charge for a first failure?

HMRC’s guidance says registration is a new requirement that trustees may not be familiar with, and that it will not charge a penalty when it finds out a trust has not been registered or maintained, as long as the trustees put things right within the time limit HMRC sets. TRSM80020 describes the process for late registration:

  1. HMRC becomes aware of a trust that was not registered by its deadline, either because it was registered late or because HMRC found it some other way.
  2. HMRC may send a warning letter to the trustee or agent.
  3. If the trust is still unregistered, it should be registered at that point.
  4. Only if the trustee or agent fails to register within the period in the letter, or fails to explain why the trust is not registrable, may a penalty be issued to the lead trustee.

So a trust that is registered late, but registered before HMRC writes or within the time given in the letter, should not attract a penalty. The manual says no automatic penalties are issued for late registration.

Does the same apply to failing to keep details up to date?

Yes. TRSM80030 says there is no automatic penalty for failing to keep the register up to date, but that failing to act when contacted by HMRC, or concealing trust data, may lead to a penalty. HMRC may send a warning letter, and a penalty may be issued to the lead trustee only if the update is not made within the time stated.

The duties being enforced are those in TRSM40010. Non taxable trusts must record changes within 90 days of the trustees becoming aware of them. Taxable trusts must also make an annual declaration by 31 January after each tax year in which a liability arises, confirming the record is up to date. Our guide to the Trust Registration Service covers what must be recorded.

When might HMRC charge a penalty?

TRSM80020 says penalties are applied case by case. Its examples are continued failure to register a trust after repeated warnings, and giving inaccurate details about a trust and continuing to fail to correct them. Regulation 83 lists what HMRC must take into account in deciding the type of sanction and level of any penalty, including:

  • the gravity and duration of the failure;
  • the degree of responsibility of the person;
  • their financial strength;
  • profits gained or losses avoided, and losses caused to others;
  • their level of cooperation with HMRC; and
  • previous contraventions.

Regulation 76(4) contains a defence: HMRC must not impose a penalty if it is satisfied that the person took all reasonable steps and exercised all due diligence to ensure the requirement would be complied with. Keeping a note of the advice taken and the dates on which the trustees acted is the practical way to rely on it.

Who is charged, and what must the notice say?

All trustees are equally responsible for the trust, but GOV.UK guidance says they nominate a lead trustee who, with any agent, registers the trust and keeps it up to date. The manual says a penalty may be issued to the lead trustee. Under regulation 83, HMRC’s notice must give the decision and the amount, its reasons, the right to a review and the right to appeal, and must say how and by when the penalty is to be paid and how it may be recovered if unpaid.

How do reviews and appeals work?

Regulation 94 requires HMRC to offer a review of a decision that can be appealed, at the same time as the decision is notified. Regulation 99 gives a right of appeal to the tribunal against a decision under regulation 76 to impose a penalty. The tribunal can quash or vary the decision, including reducing the penalty to any amount, nil included. HMRC’s guidance confirms that a review or appeal can be requested if the trustee disagrees. Our guide to statutory reviews and the tax tribunal explains the general process.

How might a case unfold?

Illustration only. A discretionary trust created in 2015 holds a share portfolio with no tax liability, so it was a non taxable registrable trust that should have been registered by 1 September 2022. The trustees overlook it. In 2026 a bank asks for proof of registration while carrying out customer due diligence, and the trustees register straight away.

  • HMRC’s published approach is not to charge, because the trust was registered without HMRC needing to set a time limit.
  • If HMRC had written first, giving 30 days to register, and the trustees had registered within those 30 days, there would again be no penalty under the published policy.
  • If the trustees ignored that letter and a reminder, a £5,000 penalty issued to the lead trustee would be likely, with a right to a review and an appeal.

What else should trustees bear in mind?

  • The TRS penalty is imposed under the Money Laundering Regulations, not the Taxes Acts, so it sits alongside the trustees’ separate duty to file the trust and estate tax return, due online by 31 January, where the trust is taxable.
  • Non UK trusts that acquired UK property before 6 October 2020 and still held it on 30 June 2026 must register by 1 September 2027. HMRC says the service cannot yet accept these registrations and will announce when it can.
  • Exclusions under Schedule 3A, such as the two year rule for will trusts or the rule for co ownership trusts, are the first thing to check before assuming a failure has occurred.
  • An agent cannot view or update a client trust without the right authority; see authorising agents for trusts and estates.

What mistakes come up most often?

  • Ignoring an HMRC letter because the trust has no tax to pay. The penalty applies to registrable non taxable trusts too.
  • Treating the absence of an automatic penalty as permission to leave the register out of date.
  • Registering but leaving optional questions unanswered beyond the 90 days GOV.UK allows to complete them.
  • Paying a penalty without considering the reasonable steps defence or a review.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.