UK government sets out conditions for disclosure of TRS data
The obligation on taxable trusts to register with HMRC's online TRS was imposed by the EU Fourth Anti-Money Laundering Directive (4AMLD) and in 2021, the Fifth Anti-Money Laundering Directive (5AMLD) extended it to all express trusts unless exempt from registration by one of the narrow group of exclusions. The registration deadline for trusts newly required to register has since been deferred until 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 strict regime under which requests will be carefully examined before being fulfilled.
Where the request is made under the ‘legitimate interest’ rule, HMRC will disclose data only where the requester demonstrates their legitimate interest. This means the request must be concerned with a specific instance of money laundering or terrorist financing in relation to a specific trust and the information on the register that is the subject of the request will further that investigation. Legitimate interest is not adequately demonstrated when the information provided by the requester does not sufficiently show reasonable grounds for suspicion of money laundering or terrorist financing on the specific trust on which the request has been made.
Alternatively, the request may be made under the offshore company rule, if the trust holds a controlling interest in a company or other legal entity in a third country. A controlling interest is usually where the trust holds more than 50 per cent of the shares in the entity or can control it in some other way. If the TRS records do not show that a controlling interest in an offshore company exists, HMRC will not disclose the information on the register.
If the request is granted, the data disclosed will be limited to the beneficial owners that are associated with the trust. For individuals, this includes name, month and year of birth, country of residence, nationality and role in the trust. For companies and other legal entities, the information will be restricted to name, office address and role in the trust.
Disclosure will also be refused where the trust is of an excluded type. These include non-express taxable trusts that are registered only because of a liability to UK taxation, express trusts that are excluded from registration and that are registered only because they are liable to UK taxation and non-UK trusts with no trustees resident in the UK that are registered only because they hold UK land or property.
HMRC will not disclose information on specific individuals if exemptions apply to them, for example those under 18 or lacking mental capacity, or where releasing the information might produce a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation.
HMRC has also set out the procedures it will follow where discrepancies are discovered in the register during the process of due-diligence checking.
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