The UK revenue authority HMRC has published details of its policy on responding to third-party requests for information held on the Trust Registration Service (TRS), under the trust data request system that will begin on 1 September 2022.
The obligation on taxable trusts to register with HMRC’s online TRS was imposed by the EU Fourth Anti-Money Laundering Directive (4AMLD). The Fifth Anti-Money Laundering Directive (5AMLD) extended this obligation to all express trusts (unless exempt from registration) in 2021.
The registration deadline for trusts newly required to register was deferred to 1 September 2022 and the time limits for trustees to inform HMRC of changes to the information held on the register is now 90 days.
5AMLD also requires the trust register to be available in principle for public scrutiny, but the UK’s implementation provides a stricter regime. From 1 September 2022, HMRC may share information on the TRS in limited circumstances with some third parties following a Trust Data Request. Trust Data Requests can be submitted under the following headings:
- Legitimate Interest Trust Data Request – Individuals or organisations must demonstrate that they are looking into a specific instance of money laundering or terrorist financing in relation to a specific trust, and that the information on the register that is the subject of the request will further that investigation.
- Offshore Company Trust Data Request – Data can be requested on a trust that holds a controlling interest in a non-EEA (‘third country’) company or other legal entity. A ‘controlling interest’ is usually where the trust holds more than 50% of the shares in the entity or can control it in some other way.
The information HMRC can share about a trust will be limited to the beneficial owners that are associated with the trust. For individuals, this includes the name, month and year of birth, country of residence, nationality, and their role in the trust. For companies and other legal entities, the information will be limited to their name, office address and their role in the trust.
HMRC will not share data on certain types of trusts, including:
- Non-express taxable trusts that are registered only because of a liability to UK taxation and not also as a registerable express trust.
- Express trusts that are excluded from registration, which are only registered because of their liability to UK taxation.
- Non-UK trusts with no trustees resident in the UK, that are registered only because they hold UK land or property.
For legitimate interest Trust Data Requests, if HMRC deems that the legitimate interest has not been adequately demonstrated, HMRC will not share information on the register. Legitimate interest will not be adequately demonstrated when:
- The requestor is not requesting data to further an investigation into a specified instance of money laundering or terrorist financing (ML/TF).
- The information provided by the requestor does not sufficiently show reasonable grounds for suspicion of ML/TF on the specific trust on which the request has been made.
For offshore company Trust Data Requests, if TRS records do not show that a controlling interest in an offshore company exists, HMRC will not share information held on the register.
HMRC will also not share information on specific individuals if exemptions apply: the individual is under 18, lacks mental capacity, or is at disproportionate risk of fraud, kidnapping blackmail, extortion, harassment, violence or intimidation as a result of releasing that information.