Author: Dr Claire Marie Calleja Zammit CAMS, Adv. Trib. Ecc. Melit, Pg. Dip. EC., LL.D.
Published on 4th June 2021

The UK’s Trust Register

In June 2017, the laws regulating the UK Trusts Register were amended to implement the provisions of the 4th, Anti-Money Laundering Directive of the European Union. Notwithstanding the UK’s departure from the European Union, laws are now being amended to implement the 5th. EU Directive as the enactment of the latter preceded Brexit. The purposes of the Trusts Register is for Her Majesty’s Revenue and Customs (HMRC) to collect and maintain information on the beneficial ownership and assets held in registrable trusts, to assist with combating money laundering and terrorist financing.

By Autumn 2022 and under the provisions of the firth Anti-Money Laundering Directive, not only shall taxable relevant trusts (trusts with UK tax liability) need to be included on the register, but all relevant trusts – unless they are expressly excluded.

This is necessary because the fifth Money Laundering Directive adopts a broader definition for relevant trust than that under the fourth Money Laundering Directive. The new definition includes non-UK trusts, which are not already registered elsewhere in the European Economic Area and includes trusts which acquire an interest in UK land; or which have one or more UK trustees and enter into a business relationship with a UK advisory firm.

Consequently, there are now four types of trust which are required to register under the fifth Money Laundering Directive:   

• Taxable relevant trusts — this can be a UK or non-UK trust and the below three types of non-taxable trusts:
• Type A — a UK express trust which is not specifically excluded nor registered elsewhere in the EEA.
• Type B — a non-UK express trust which has at least one UK-resident trustee and which either acquires land or property in the UK or enters into a business relationship with a relevant person in the UK, provided that the trust it is not excluded nor registered elsewhere in the EEA.
• Type C— a non-UK express trust where all trustees are non-UK residents, but the trust acquires land in the UK.

Throughout its lifetime, a trust may become taxable or non-taxable.  Moreover, a trust which is for instance excluded from registration, may still need to eventually register if it acquires a UK tax liability. 

Notable exclusions to registration are low risk trusts for anti-money laundering purposes or trusts where information about them is held in another EEA country.  The list of trusts excluded from the new requirements is set out in Schedule 3A to the 2020 regulations. There are also exceptions for trusts which arise in commercial transactions and financial markets.

According to guidelines issued by HMRC, non-taxable trusts which were/are set up before 9 February 2022 are required to register on the Trusts Register by 10 March 2022 albeit HMRC has admitted that its trust registration service is not yet ready for use. This is why the   deadline for registration is Autumn 2022 so as to allow trustees around 12 months following the system upgrade to comply.

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Author: Dr Claire Marie Calleja Zammit CAMS, Adv. Trib. Ecc. Melit, Pg. Dip. EC., LL.D.
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