• UK Trust Register - third-party access from 1 September 2022
Article:

UK Trust Register - third-party access from 1 September 2022

04 August 2022

Original content provided by BDO United Kingdom

The 1 September 2022 deadline for registering Trusts under the EU’s 5th Anti Money Laundering Directive (5MLD) is rapidly approaching. As many Trustees and their agents are dealing with the relevant registrations of Trusts under their control ahead of this deadline, thoughts are also now turning to the data access requests that third parties can submit from 1 September 2022.

HMRC have issued initial guidance on the Third Party Access Requests and more detail is expected over the Summer. The third-party access requests only apply to Trusts registerable under 5MLD and not to Trusts that are registered only because of a liability to UK tax. However, Law Enforcement Authorities can still make requests for information on the register regarding these trusts.

When 'legitimate interest’ is required

The initial guidance provides some reassurance to Trustees that the onus is on the requestor to demonstrate that they have a ‘legitimate interest’ to access that information and must be looking into a specified specific instance of money laundering or terrorist financing. The requestor must also provide the name of the specific Trust for which the data access request relates.

Third country assets

Under the 5MLD regulations, information can also be requested when a trust has a controlling interest in a third country (non-EEA) entity. This is typically where the interest held in an offshore entity is 50% or greater. Although for third country entity requests the requestor will still need to name a specific trust there is no legislative obligation for the requestor to have a ‘legitimate interest’. HMRC have said previously that they would expect third party entity requests to be in line with the general money laundering objectives of the Directive.

When data will not be shared

HMRC have also confirmed that information in respect of beneficial owners who are minors or lack mental capacity will be exempt from being supplied under a third party access request or third country entity request.

Additionally, information may also be exempt where making the information available would expose the beneficial owner to a disproportionate risk of harm. Further details on how Trustees would make an application for data to be protected under this exemption are expected shortly.

How BDO can help

If you have any questions about the UK Trust Register or would like to know how the latest guidance impacts your clients, please get in touch with Fiona Hall.