The Government has published the outcome of its technical consultation on implementation of the EU Fifth Anti-Money Laundering Directive (5AMLD) and its impact on trust registration.
STEP has been working with the Treasury to ensure that any concessions agreed regarding the transposition of 5AMLD worked well.
For example, prior to this consultation, the regulations stipulated that offshore trusts had to be registered even if there was no UK trustee. Now, offshore trustees entering into a business relationship in the UK will not have to register the trust, unless there is a UK trustee.
The full list of exempt trusts that will not need to be registered as a result of the regulations are:
- trusts imposed by statute where these do not result from the clear intention of the settlor, for example the statutory trust arising on intestacy
- UK-registered pension trusts
- Charitable trusts regulated in the UK
- Pure protection life insurance policies and those paying out on critical illness or disablement, including group policies
- Trusts used by the UK government and other UK public authorities
- Trusts for vulnerable beneficiaries or bereaved minors
- Personal injury trusts
- Save-as-you-earn schemes and share incentive plans
- Maintenance fund trusts
- Certain trusts incidental to commercial transactions
- Certain trusts used as part of financial markets infrastructure
- Authorised unit trusts
- Co-ownership trusts, where the trustees and beneficiaries are the same person
- Will trusts created on death that receive assets only from the estate and trusts that receive death benefits only from a life insurance policy and are would up within two years of death
- Existing trusts holding assets valued at less than £100 unless/until further assets are added
The government has set a deadline of 10 March 2022 for existing trusts to register on the HMRC’s Trust Registration Service (TRS), or to update their records if they have already done so.
Emily Deane TEP, Technical Counsel at STEP, said:
“STEP is delighted that the government has taken a pragmatic approach to the implementation of 5AMLD, particularly on the business relationship point, which could have had an incredibly damaging effect on the use of UK professional service providers if interpreted in the same way as 4AMLD.
“STEP has held numerous meetings with the government over the last 18 months emphasising the negative impact that a wide interpretation of the directive could have and we are pleased and relieved that our advice and evidence have been taken into consideration so comprehensively. We are also very pleased to note that the categories of trust that will not need to be reported has significantly expanded, including will trusts, a logical decision that will reduce the compliance burden.”
The regulations to implement the provisions have now been laid before parliament.
