Over the past few years, the Trust Registration Service (TRS) has evolved from what was once a relatively niche compliance requirement into a central part of trust administration. Trustees who may previously have had limited interaction with HMRC are now finding that registration is a key step in managing trust assets.
A recent update from HMRC has reinforced just how important this has become. Trustees selling UK property must now follow a much stricter ‘register first, report second’ process than before.
The Update: Agent Update 140
In February 2026, HMRC’s Agent Update 140 clarified a critical requirement: trusts must be fully registered on the TRS before a Capital Gains Tax (CGT) on UK property return can be submitted.
In practical terms, the TRS now acts as a gateway to the CGT reporting system. If a trust is not registered, trustees will be unable to access the online portal to report the sale or pay any tax due.
This represents a shift from what some trustees may have previously experienced, where registration and reporting could be dealt with more flexibly or at different stages.
The 60-Day reporting crunch
The change creates a significant logistical challenge. Trustees are generally required to report the disposal of UK property and pay any CGT due within 60 days of completion.
For many trusts - particularly older ones created long before the TRS existed - this can create real pressure. If trustees only encounter the TRS requirement at the point of sale, they must quickly:
- Gather historical information about the trust, including details of settlors, trustees and beneficiaries
- Set up a Government Gateway account
- Complete and submit the TRS registration
- Wait for HMRC to process the registration
- Only then submit the CGT return
Each of these steps takes time. If registration is left until after completion, the 60-day deadline can quickly become difficult to meet, increasing the risk of late filing penalties and interest.
No ‘paper’ loopholes
Some trustees may assume that submitting a paper CGT return could avoid the need for digital registration. However, HMRC has made it clear that this is not an option.
Even where a paper return is submitted, the trust must still be registered on the TRS first. There is no alternative route that bypasses this requirement, meaning all trustees must engage with the registration process regardless of how they intend to report the transaction.
A small silver lining: automatic offsetting
There is at least one positive development. HMRC has confirmed that where a trust overpays CGT on a property sale, any overpayment can now be automatically offset against other Self-Assessment liabilities.
This should reduce the administrative burden on trustees, who would otherwise need to submit separate repayment claims or manually transfer funds between different HMRC accounts. However, as with many HMRC processes, the speed at which these adjustments are made may vary.
What does this mean for Trustees?
The key message is clear: do not wait until a sale is agreed to think about TRS registration.
If a trust holds UK property, registration should be treated as part of the early preparation for any future sale, not something to deal with once a transaction is underway.
While HMRC does have the power to impose penalties for late registration or reporting, they will often consider whether trustees have taken “reasonable steps” to comply. Being able to demonstrate that registration was started as soon as a sale was contemplated can be an important factor in mitigating potential penalties.
What about Estates?
It is also important to note that similar rules can apply to estates. If the administration of an estate continues for more than two years after death, the estate may need to be registered on the TRS.
This requirement applies regardless of whether the estate is liable for Inheritance Tax, Income Tax or Capital Gains Tax, and can catch executors by surprise if they are not aware of the timeline.
Getting the timing right
The interaction between TRS registration and property transactions highlights the importance of early advice and careful planning.
Delays in registration can have a direct impact on the ability to meet tax deadlines, complete transactions efficiently and avoid unnecessary costs.
If you would like to discuss how these changes may affect your trust or estate, or need assistance with TRS registration or property sales, our team would be happy to help.
