Pension schemes have generally been regarded as a low risk for money laundering and so have been outside the ambit of anti-money laundering regulations.
However, the new Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 have introduced requirements to register details of trusts with HMRC's new Trust Registration Service. The requirements are aimed at all UK trusts which can include, in certain circumstances, occupational pension schemes.
The requirement to register will apply where the trustees have incurred a liability, in any given tax year, to pay income tax, capital gains tax, inheritance tax, stamp duty land tax, stamp duty reserve tax or land and building transaction tax (Scotland).
Of course pensions schemes benefit from many tax exemptions, so a tax liability will not often be incurred. Guidance issued by HMRC also says that a registered pension scheme will not need to register if the scheme administrator (usually the trustees) has to pay income tax because
- they are jointly and severally liable with the member for a lifetime allowance charge
- they pay the member's annual allowance charge (under the "scheme pays" regime) or
- they are liable to:
- special lump sum death benefits charge
- short service refund lump sum charge
- authorised surplus payments charge
- de-registration charge
- unauthorised payments charge
- unauthorised payments surcharge
- scheme sanction charge or
- tax under PAYE on a member's pension or lump sum benefits or on the benefits of the recipient after the member dies.
Nevertheless, trustees should check whether they have incurred any tax liability during 2016-2017 as there are deadlines for reporting (which differ according to the tax and whether the trust is already registered for self-assessment). Registration has to be made for each tax year in which a relevant tax liability is incurred, so trustees will need to ensure that they have a mechanism for reviewing (and registering if required) each year.