The deadline to register existing trusts that fall within the scope of the Fifth Anti-Money Laundering Directive is 1 September 2022.
The Trust Registration Service (TRS) is a register of the beneficial ownership of trusts. It was set up in 2017 to satisfy the requirements of The Money Laundering and Terrorist Financing Regulations (amendment) 2019. All EU member states have a similar register and the UK agreed to keep the TRS as part of the Brexit withdrawal agreement.
If your firm provides trust or company services or tax adviser services, you might need to make clients aware of any duties they have with regards registration of trusts. In practice, it is also possible to undertake the registration on behalf of your clients.
Solicitors who have historically acted as trustees or advised the creation of trusts will need to know what the changes mean for their practice, otherwise they risk failing to comply with their AML obligations. Further information on the new rules can be found here: www.gov.uk/guidance/trust-registration-extension-an-overview
What do you need to do?
Law firms need to think now about the implications of the Trust Registration scheme and adapt their systems. In a previous article we highlighted some guidance for law firms, including:
- Registration– Put in place a process for the registration of Trusts. All UK and some non-UK trusts that are currently open, will need to be registered, whether or not the trust has to pay any tax, but with some specific exclusions (see below)
- Questionnaire – Create a Trust questionnaire which means you can capture the information needed to register a Trust – for ease of reference, we have provided this information under section 3.4 below. Send the questionnaire to Trusts you have advised on and have been registered and Trusts you registered on behalf of a client (more information will now be needed) and send the questionnaire to any new Trusts that you create. It will be wise to have one questionnaire for an individual and one for a Company.
- Trust Register– Create a Trust Register which identifies: –
- The name(s) of the Trustees
- The Date of the Trust
- The type of Trust
- The date the Trust needs to be registered
- The date of Registration
- Whether a completed Trust Questionnaire (see above) has been received
- Review– Review your portfolio to identify Trusts the firm has created and establish if it needs to be registered by the firm or the Trustee if not the firm. Place them into your register. Ensure you are clear on which Trusts needs to be registered and which do not.
- Contact– Contact Trustees to notify them of their obligation and inform them of the penalties for failure to meet them. You can offer to assist, by registering the Trust, if they are not sure what to do. This would be a chargeable service.
- Training– Provide Training to your Private Client Team on the new regulations:-
- the types of trust to be registered
- the required information
- how to register them
- when they need to be registered.
- Service and Fees– Review your services and fees to confirm the fees you will charge for registering a Trust (whether you are the Trustee or not)
- Website– Update your website with any changes to your services.
- Future Advice– Your firm will need to take a stance if instructed to assist in a Trust matter which has not been properly registered. You will likely need to refuse to act until the registration has been properly registered (as the Trust will breach requirement of the AML Regulations). This is ultimately a training issue and ensuring you raise the appropriate enquiries with any new client.
- Guidance Notes– in any standard information you send to clients, at the client care stage, who have instructed the firm to create a Trust or a Trust will be created as part of the advice provided, ensure there is an appropriate statement setting out the requirement for Trusts to be registered. This will ensure all clients are clear of the need to register the Trust whether the firm is instructed to do so or not. You can also make it clear that the firm can register the Trust for an additional fee even where the firm or a member of the firm is not a Trustee. A link to the appropriate Gov.UK website will assist – the link is provided below.
- Check your SRA AML approvals– It is also wise to check that you have notified the SRA that your firm handles Trust work and Tax Advisor where you need to update your information you will need to file an FA10b which is how you update your profile with the SRA and advise them of the services your undertake which are regulated under the AML regulations. If you cannot find your last files FA10b the SRA will be able to advise you of the services you are regulated for.
The full article can be read here: Trust Registration Deadline – What you need to do which further provides information regarding:
- Who is responsible for registering a Trust?
- Why do I need to take this action?
- What Trust do I need to register or ensure are registered?
- How do I register a Trust?
- When do I need to register a Trust?
- What is needed to register a Trust?
- What types of Trust do not need to be registered?
Download a copy of the Trust Registration article here:
At The Strategic Partner, we provide law firms with a range of services to assist in the management of their business. Maintaining a Trust Register is part of our Risk, Regulation and Compliance Service (including AML)
For more information about The Strategic Partner or any of our services, you can call us on 02039119710, you can email us email@example.com or you can visit our website to make an online enquiry