The UK will shortly be due to implement new anti-money laundering legislation and – although there is still uncertainty over the details – I want to ensure this is on radar for ICAEW members who deal with trusts.
At the end of 2017, the UK implemented the EU’s 4th Anti-Money Laundering Directive and, as part of this, introduced a register of trusts with a UK tax consequence – the Trust Registration Service (TRS) – which is held and operated by HMRC.
At the time, ICAEW wrote to the Treasury; we highlighted various weaknesses in HMRC’s systems and processes, and noted that the UK had introduced the TRS as a ‘gold plated’ response to implementing the EU regulations.
Initially, the TRS was blighted by numerous challenges. The deadlines for registration had to be extended, as it was not possible for trustees and their agents to meet the original deadlines due to a failure to provide the online service on time. Even now it is not possible for amendments to be made to the register online.
A new directive
Government is due to implement the 5th Anti-Money Laundering Directive by 10th January 2020.
While current regulations apply only to trusts with a tax consequence in the UK, one aspect of the new legislation will be to extend the TRS to include all UK express trusts regardless of their tax status – which could include bare trusts, empty trusts created to receive life policy funds on death, pension scheme trusts and charitable trusts – depending upon how government chooses to implement the Directive.
A consultation on extension of the TRS was expected this past autumn, but the recent political landscape has inevitably pushed this down the agenda.
There is uncertainty over exactly how and when the implementation will occur; government is in purdah, the Christmas break is fast approaching, and the consultation and draft regulations have still not been published.
However, it is crucial that lessons are learned and that the new regulations are more proportionate. It is also imperative that HMRC have systems up and running to effectively deal with the sudden influx of new registrations.
We believe that whomever forms the next government should strongly consider deferring the commencement date for the extended trust register until the online system is fully active, and the scope of entities to be registered is confirmed.
For further information you can visit our dedicated webpage here, which links to a factsheet and which will be updated when the revised guidance is published.
Knowing about the trust register from this article is quite helpful. I got to know about the history of it and it’s directive. It made me understand the importance of the trust register and how we can get registered. It is good to go through this article before the UK implements the law. For more information click https://vakilsearch.com/.