Trustees need official clarification (promised by HMRC) on their duties under new anti-money laundering measures. Professional trustees may need to register with a supervisory authority.
Pension scheme trustees are in line for new duties under the UK's revised anti-money laundering regulations. But it is unclear who the duties apply to and how onerous they will be. Industry bodies are pressing the government for early clarification.
Views on who the regulations apply to differ widely. On one reading they only apply to professional trustees, and only to some of them. On another reading, lay and professional trustees of pension schemes would be caught.
Delayed by the election, the regulations came into force at the end of June having been available for a matter of days.
The general aim of this part of the regulations is to throw more light on the beneficial (or real) ownership of assets held in trusts of all kinds.
What should trustees do pending clarification?
In the face of the significant uncertainty we recommend pension scheme trustees should generally tread water until the position is clearer and the promised HMRC guidance is available.
That said, one practical step trustees can take is to review the categories of data they hold against those the regulations list.
There are potential civil and criminal penalties for non-compliance but we see little risk of enforcement action over the ownership provisions while they are under the current level of discussion.
The main potential new obligations for trustees are:
- to assemble and maintain accurate and up-to-date data on active, deferred and pensioner members and potential survivors (though a generic description of survivors may suffice). This includes date of birth, NI no. or tax UTR, a usual address in the UK or, if none, passport or ID card details (country, number, date of issue and expiry)
- to file the above details with HMRC if the scheme becomes liable for any one of income tax, CGT, IHT, SDLT (or the Scottish equivalent) or SDRT in relation to its assets. Having filed data, trustees are required to notify HMRC of any changes. The earliest these filings might be required is 31 January 2018.
Firms in the business of acting as, or supplying, professional trustees to pension schemes ("trust or company service providers" or TCSPs) will need to be registered with a "supervisory authority". That body will oversee their compliance with anti-money laundering procedures, like customer due diligence.
The FCA is such an authority, as are various professional bodies. The default supervisory authority for TCSPs is HMRC.
That said, one of the uncertainties for TCSPs is whether a concession under the previous money laundering regulations that they need not register if they only act in relation to low risk trusts like occupational pension schemes remains available.