When is a trust record required?

Who is required to comply with 4AMLD? 

Under 4AMLD, trustees of certain settlements are required to maintain accurate and up to date records in writing under regulation 44 of the 2017 Money Laundering Regulations Act. These records should be kept by trustees of ‘relevant trusts’, which can include:

• UK express trusts 
• Non-UK express trusts that have UK source income or assets and are required to pay UK tax, including Income Tax, Capital Gains Tax, Inheritance Tax or Stamp Duty Land Tax
• UK trusts not currently registered on the trust register

If trustees are being paid to act as trustees of that trust, they are required to retain this information for five years after the final trust distributions before they can delete these records. In certain circumstances, they may be required to retain this information for longer.

What to include on the trust record

If you’re required to keep a trust record, you should include the following specific details:

• Full name of the trust
• Date the trust was established 
• Country of residence for tax purposes
• Country where the trust is administered 
• Contact details, including an address for the trustee(s)
• Name of any paid professional advisers to the trust 
• Details of the settlors, beneficiaries and potential beneficiaries
• Details or the protector of the trust, if there is one

An individual may be classed as a potential beneficiary if they are referred to in the trust instrument, or if there’s a document from the settlor which refers to them, such as a letter of wishes written by the settlor in relation to the trust. Sometimes the beneficiaries of the trust will not be named and are only identified by class. In this case, it’s acceptable to record the class of beneficiaries. 

When should you update the record?

If any of the details listed above change, the trustees should update the trust record. The information must also be updated where the trustees enter into a transaction with a ‘relevant person’ or where a trustee enters into a business relationship with a trust service provider. A ‘relevant person’ can include financial institutions, estate agents, legal professionals and accountants. 

Failure to comply

Any law enforcement authority, such as HMRC, can request information on the trust relating to the beneficial owners regardless of whether or not the trustees have incurred a tax liability. Both HMRC and the FCA have powers to impose a penalty where there has been a failure to comply with these regulations.

If you are a trustee of a settlement and you’re unsure as to whether you should be keeping a trust record, or if you’d like support with completing the details, please fill out the form below and one of our experts will be in touch to discuss your requirements.