All trusts to be required to register with TRS

Following the introduction of the Trust Registration Service (TRS) last year, the Fifth Anti-Money Laundering Directive (“5AMLD”) is now expected to extend the registration process to include all trusts regardless of their tax consequence.

At the moment, TRS is only required where there is a tax consequence. TRS was created a year ago to meet the requirements of the Fourth Anti-Money Laundering Directive, which was incorporated into UK law in June 2017.

It is likely that 5AMLD could extend registration to trusts linked to financial products such as life policies, shareholder protection policies, whole of life policies, discounted gift trusts, and perhaps even just jointly owned property. The changes are expected to significantly increase the number of trusts required to register with HMRC. They might also extend to non-EU resident trusts owning UK property or with a business relationship in the UK.

The changes brought in by 5AMLD will also make information on beneficial owners of trusts open to those who can demonstrate a "legitimate interest" in obtaining the data.

Key dates

The UK has until 10 January 2020 to incorporate 5AMLD into UK law. The deadline for implementing the TRS requirements is 10 March 2020. Regardless of Brexit, this will happen. A consultation on the initial policy changes, including penalties, is expected to happen by early 2019.