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Trusts Obligated to Register

Pursuant to the European Union’s Fifth Directive on Anti Money-Laundering, the United Kingdom (UK) has decided to include it as part of its national legislation, prior to leaving or Brexiting the European coalition, which provides that all UK trusts or subject to UK law, even those foreign trusts that have business relationships with “obliged entities,” shall have until January 31, 2020 to register with the Trust Registration Service (TRS).

An “obliged entity” includes lawyers, accountants, tax advisers, estate agents, banks and other financial institutions, as well as other intermediaries such as auction houses and art galleries residing in the UK, or subject to its jurisdiction.

Since 2017 until now, only UK trusts that had a tax liability pursuant to capital gains taxes, income taxes, or stamp taxes (something similar to a surcharge on property ownership in the UK), were obligated to register.

Filing Deadlines

In addition to those trusts, express trusts (those created not by court order or operation of law) existing on March 10, 2020, now also have the obligation, whether or not they have any tax liability, to register with the TRS by March 31, 2021. For their part, all those trusts that are created on April 1, 2020 and beyond, shall only have 30 days to register. Also, any trust that has any changes or modifications after these dates, shall have 30 days to report such changes or modifications.

Public Information

Notwithstanding the foregoing, and in addition to registering and reporting the required information, the information in the TRS will be public starting on March 10, 2020, and the information may be accessed by any person, including journalists, that can show a “legitimate interest” or by submitting a written request regarding a UK trust that controls or has an interest in a non-EU company.

What Information Must Be Reported?

The corresponding trustee has the obligation to file with the TRS the following information:

  • Date in which the trust was established;
  • An account statement describing the trust assets and their value;
  • The country where the trust is resident for tax purposes;
  • The place of its administration and contact address;
  • The identity of the person or settlor establishing the trust;
  • Identity of every person acting as trustee; and
  • Identities of all beneficiaries including their names, contact details, date of birth, and national insurance number if UK resident or passport number, if based outside the UK.

Ambiguities

To this day, there are still many details that the government has not made known or explained how it will implement the new rules in practice such in the case of trusts created between the 10th and 31st of March of this year, or what the fines and penalties will be for failure to register or report the information, although everything seems to point that also trusts located or created in the channel islands such as Isle of Man, Jersey, and Guernsey, even though they are not part of the UK or the European Union, if those trust are subject to UK law, which usually they are, these trusts will also be subject to comply with registry and reporting of information.

If you have a trust based on the laws of the UK, call us at (800) 694-6604) to schedule an appointment to evaluate which changes need to be made to your trust to maintain your privacy and personal safety.