In April 2019, the government held a consultation seeking views on transposing the Fifth Money Laundering Directive into national law. The consultation ended on 10 June 2019. The Law Society responded to that original consultation here. The government then issued regulations that came into force on 10 January 2020 relating to most aspects of transposition, but it did not cover trust registration.
A further technical consultation on trust registration was published by the government on 24 January 2020, including draft legislation and proposals on the types of express trusts that will be required to register, data collection and sharing, and penalties. Our response to that technical consultation, which was submitted to HM Treasury and HM Revenue & Customs on 21 February 2020, can be found below.
The legal profession has a strong interest in a successful, effective and proportionate Anti-Money Laundering regime. However, we are concerned that the current proposals will require enormous numbers of low risk trusts to be registered. We urge the government to transpose the Directive in a way which proportionate to the UK context, where trusts arise in many different types of ordinary arrangements.
What this means for solicitors
Solicitors who advise on a wide range of transactions in both commercial and private contexts will need to consider the potential registration consequences of the broadening scope of the trust registration service.
The new rules are expected to come into effect from 10 March 2020 subject to the outcome of the consultation.