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New money laundering rules for trustees and Scottish LPs

11 July 2017

The EU's Fourth Money Laundering Directive was brought into UK law on 26 June 2017 through the ‘Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017’. All other EU member states are required to implement the Directive from this date.

One of the most important changes is that the Directive requires member states to maintain registers of beneficial ownership for legal entities. As the UK already has beneficial owner registers for companies and LLP, the new regulations now extend these rules to trusts (and confirm that Scottish limited partnerships must report).

HMRC will be launching a register of all trusts for which it holds records. Records will only be accessible by the trustees but they must confirm that the information it shows about the trust’s beneficial owners is correct where submitting trust tax returns for 2016/17 (ie by 31 January 2018). For new trusts (express trusts that generate tax consequences), trustees must register them by 5 October 2017 and, going forward, the new online trust registration form 41G(trusts) will have to show people with significant control (PSC) data.

Under the new rules, changes in the PSCs’ positions for all entities (companies, LLPs, LPs, trusts etc) must be notified within 14 days of the change taking place. Companies will no longer need to complete an annual confirmation statement on their PSCs, but LLPs, LPs and trusts will need to complete one. 

Scottish Limited Partnerships

The Scottish Partnerships (Register of People with Significant Control) Regulations 2017 came into force on 26 June 2017 (although, in most cases the effective date by which action must be taken will be no earlier than 7 August 2017).

The regulations apply to all Scottish limited partnerships (SLPs) and will require every SLP to deliver to Companies House information relating to PSCs in relation to the SLP, in the same way that companies and LLPs already report on their PSCs.

SLPs created before 24 July 2017 must report on PSCs to the Registrar of Companies by 7 August 2017 or, if later, within 14 days of confirming the relevant PSC’s details. Where a PSC’s details remain unconfirmed a holding statement to that effect may have to be made. For new SLPs created from 24 July 2017 details of PSCs must be submitted at the time of first registration. Thereafter, changes in the PSCs’ positions must be notified within 14 days of the changes taking place and an annual confirmation statement of the PSC position is required.

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