The UK Trust Register is now live at HMRC.
In accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, which came into force on 26 June 2017, the trustees of all express trusts with UK tax consequences (whether resident in the UK or not) are required to register details of their trusts.
5 October 2017 is the deadline for registering a new express trust or one beginning to generate income or chargeable gains liable to tax in 2016/2017 that has not previously been registered with HMRC. The deadline for registering an existing trust is 31 January 2018.
The Trust Register is operated by HMRC and is designed to meet the needs of the EU's Fourth Anti-Money Laundering Directive, which aims to improve the transparency of trusts. The information contained in the Trust Register will not be available to the public for now, but law enforcement officers will be able to review it, and HMRC will use it to understand the tax liabilities of individuals who have been registered. This strengthens the existing rules and makes the fight against money laundering and terrorism financing more effective. It also improves transparency to prevent tax avoidance.
Trustees must provide details of:
The trustees must be ready to provide further details of the relevant individuals, including:
The trustee must also provide general information about the trust, including:
Once registered, the trustees must then report to HMRC on or before 31 January of each year in which tax is paid to confirm that the registered details remain up to date, or provide details of any changes.
Failure to meet the above requirements may result in civil and/or criminal penalties, such as paying a fine or imprisonment for up to two years.
The new provisions are onerous and wide-reaching, but it should be borne in mind that it is likely that the EU's Fourth Anti-Money Laundering Directive will be followed by a Fifth Directive in the not-too-distant future. This is likely to further tighten the AML regime in order to further improve the fight against money laundering and terrorist financing, and may include further onerous provisions for trustees.
Contributor: Alice Evelegh
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.