UK tax office HM Revenue & Customs will no longer impose £5,000 fines for first time failure to register under the new trust rules.
In an update to its Trust Registration Service Manual, HMRC said: "In recognition of the fact that the registration requirement is a new and unfamiliar obligation for many trustees, there will be no penalty for a first offence of failure to register or late registration of a trust unless that failure is shown to be due to deliberate behaviour on the part of the trustees.
"Where failures to register are due to deliberate behaviour on the part of the trustees, a £5000 penalty may be charged per offence."
The tax office continued: "In practice this means that should HMRC become aware of a trust which has not been registered by the relevant deadline - either because that trust has been registered late or because HMRC have identified that trust's existence by other means - HMRC may issue a warning letter to the trustee or agent.
"If the trust is not yet registered, the trustee or agent should register it at that point. If the trustee or agent then fails to register the trust within the time period stated within the warning letter, or fails to explain why their trust is not liable to registration, a penalty may be issued to the lead trustee."
HMRC added: "Penalties for deliberate non-compliance will be applied on a case-by-case basis.
"Examples of the circumstances in which such a penalty might apply include: continued failure to register a trust following repeated warnings; or providing details on a given trust that are deliberately inaccurate accompanied by continued failure to amend those details."