Trusts caught by new anti-money laundering rules

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLR”) bring the Fourth EU Anti-Money Laundering Directive into UK law.

The effect of MLR is that express trusts which generate a UK tax consequence will have to be registered, and the register will need to be updated each year that the trust generates a UK tax consequence.

Trustees are obliged to provide HMRC with information about the identity of the settlor, trustees, protector (if applicable), all other persons exercising effective control over the trust (if applicable) and the beneficiaries (or class of beneficiaries). MLR defines these persons as the “beneficial owners” of the trust.

Required information is:

• Name
• Date of birth
• Correspondence address or other contact details
• If the person is a UK resident, a national insurance number; if not, a passport or ID number
• If the person information is being supplied about is not an individual, their unique taxpayer reference must be provided instead of their NI number
• If the trust has a class of beneficiaries, a description of the class of persons entitled to the benefit.

General information must be provided about the nature of the trust including its name, the date of establishment, a statement of accounts describing the assets, the country where it is resident for tax purposes, the place it is administered and a contact address.