Trust Registration Service - The Latest Guidance for Farming Partnerships

Introduction

Despite the deadline of September 2022, there are still many farming partnerships that have not yet registered partnership property that is held in trust with the TRS, sometimes through lack of understanding of partnership property.

This virtual classroom seminar is aimed at those unregistered partnerships.

There are also many farmers and farm advisers who do not understand the concept of ‘partnership property being held in trust’ and have therefore ignored the various warnings and the lack of registration is due to lack of clarity on the legal position. There is also the need to tie in the move to 50% APR and BPR from April 2026 (or 2027) with TRS requirements.

The initial HMRC guidance was possibly misleading with a focus on partnership agreements rather than an explanation of why the registration and to whom the registration applied. All farm partnership property is effectively held in trust but there are some exemptions from the registration - legal advisers should define the correct position through an updated partnership agreement. As a result, HMRC have taken a ‘soft approach’ to penalties, however, with the two-year anniversary of the start of registration of partnership property having passed, there is an overwhelming need to check the ‘trust’ status of every farming partnership now.

Many farm advisers acting for agricultural partnerships have rather avoided the subject of TRS registration for partnership property and have not made full warnings to clients, which is risky with penalties looming and farm succession planning being undertaken. This virtual classroom seminar explains a working strategy for those advisers who are late with registration and uncertain of some confusing areas of partnership ownership. There are incorrect partnership accounts regarding ownership in existence which need to be clarified as part of TRS work.

The session looks at the important ongoing need and advantages for understanding, warning clients and registering with TRS as applicable and taking the advantages of the evidence of 50% Business Property Relief (‘BPR’) for inheritance tax (IHT) and 100% BPR of the £1million allowance.

What You Will Learn

This live and interactive session will cover the following:

• How and why is farm partnership property held in trust? The need for legal clarity and protection of beneficiaries
• The importance of the partnership agreement
• Partnerships cannot legally own property - hence the need for the trust
• Legal title v beneficial interest - the need for legal understanding
• The need to urgently clarify/update the partnership agreement for TRS and all changes of succession planning, lifetime gifting etc
• The advantages to registering partnership property held in trust with TRS
• The TRS registration with benefit of the 100% BPR for the £1million allowance
• Complex varying property ownership within partnership - more than one registration?
• Has TRS registration encouraged more incorporation with R&D relief at 130% - working with both partnership and Ltd company, the ongoing need
• Will TRS registration impact on move from sole trader to partnership?
• Disadvantages of incorporation of the family farm in TRS context
• The need for TRS registration to be part of full farm succession planning
• The impact of lifetime transfers on TRS and change of ownership
• Accounts disclosure of the trust and land capital accounts - accounts rectification if appropriate
• TRS registration with no partnership agreement
• The need for good notes to the farm accounts for disclosure clarity of partnership property for clear understanding
• The risk of not understanding Land Capital Accounts in the TRS context
• Farm cottages and the need to consider TRS - partnership property - the Balfour advantage of s.105(3)
• The interaction of tenancies with TRS
• Updating existing TRS details for all the changes

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.