New regulations on money laundering and terrorist financing came into force at the end of June which impose new requirements on pension scheme trustees in relation to record-keeping and provision of information. HM Revenue & Customs (“HMRC”) has now published guidance setting out details of the information that trustees are required to hold and (in some cases) to provide to HMRC.
Under the regulations, trustees are required to hold information on the scheme’s “beneficial owners”. For these purposes, a scheme’s beneficial owners are defined as including:
• the members;
• other beneficiaries such as members’ spouses and dependants, and employers to whom a surplus can be paid under the scheme rules;
• the trustees;
• the employer that originally established the scheme or the scheme’s current participating employer(s) (if the original employer has ceased to exist); and
• any other person who exercises control over the scheme.
The information that HMRC believes schemes should hold is significantly more detailed than the information that HMRC will require schemes to provide to HMRC itself. For example, HMRC believes that, for each member or other beneficiary who has received pension or lump sum benefits from the scheme since 26 June 2017, the scheme should hold a National Insurance number, unique taxpayer reference or residential address, and if that address is not in the UK, the scheme should hold details of the individual’s passport, ID card or equivalent form of identification. There is debate in the industry about whether HMRC has correctly interpreted the requirements of the regulations in this respect. However, schemes may wish to adopt a cautious approach and ensure that the information they hold on their scheme’s beneficial owners meets the recordkeeping requirements as interpreted by HMRC.
Provision of information to HMRC
Where the scheme has incurred a liability in the 2016/17 tax year to pay income tax, capital gains tax (“CGT”), inheritance tax, stamp duty land tax, stamp duty reserve tax or land and buildings transaction tax on the scheme’s assets or income1 , it must also to provide information about the scheme’s beneficial owners and the scheme itself to HMRC by 31 January 2018.
Trustees must use HMRC’s Trust Registration Service (“TRS”) to provide the required information on the scheme and its beneficial owners to HMRC. Trustees must register with the TRS in order to use it. If the scheme is not registered with HMRC for selfassessment and has incurred an income tax or CGT liability in the 2016/17 tax year, it must register with the TRS by 5 January 2018, and then provide the required information on the scheme and its beneficial owners by 31 January 2018. In all other circumstances, the scheme must register with the TRS (and provide the required information on the scheme and its beneficial owners) by 31 January 2018. If the scheme has not incurred one of the applicable tax liabilities in the 2016/17 tax year, it is not required to register with the TRS or to provide information to HMRC.
Other provision of information obligations
Trustees are also required to provide certain information when entering into business relationships or transactions with parties who are required to conduct client due diligence under the regulations, and to law enforcement authorities.