BRUSSELS ANTI-MONEY LAUNDERING VOTE WILL REQUIRE UK FAMILIES TO PUBLICLY REGISTER FINANCIAL AFFAIRS
The Society of Trust and Estate Practitioners (STEP) is disappointed at the outcome of this week’s vote in Brussels to introduce new requirements for family trusts to be disclosed on public registers. STEP supported the original draft legislation to enhance anti-money laundering procedures proposed by the EU Commission, but the proposal voted through by the Economic Affairs and the Justice and Home Affairs Committees will require all trusts, however low risk from an anti-money laundering point of view, to be entered on a public register showing details of all the beneficiaries.
STEP Deputy Chief Executive George Hodgson said: ‘The decision by the Economic Affairs and the Justice and Home Affairs Committees is a disappointing outcome and seems to be based on a complete misconception of how trusts are used by most families in the UK. It will potentially impose bureaucratic burdens on millions of families in the UK and require them to publicly register details of plans they may have put in place to provide for family members.’
In the UK most homes owned jointly are legally held in trust, as are life insurance policies and trusts are widely used to provide for vulnerable family members. HMRC research confirms that in around a quarter of cases, trusts are used to help protect vulnerable family members rather than hide illicit funds.
Mr Hodgson added: ‘While STEP supports efforts to make anti-money laundering rules more effective, most UK trusts are very low risk in money laundering terms. The establishment of public registers will result in little gain for significant cost and loss of privacy for UK families.’
A further vote on the new requirements by the whole European Parliament is expected in March. Read more from the European Parliament on the vote to include family trusts on public registers.