BENEFICIAL OWNERSHIP OF TRUSTS – FILING IN CENTRAL REGISTER NOW REQUIRED

In this short article we provide an overview of the upcoming requirement for certain trustees to be registered as beneficial owners with the Revenue Commissioners. This requirement will no doubt have a profound administrative impact on trustees of sports clubs, charities, national governing bodies and indeed the beneficial owners of such trusts. With a fast approaching filing deadline, this is a matter that requires attention.

Background

The European Union (Anti—Money Laundering: Beneficial Ownership of Trusts) Regulations 2021 (“the Regulations”) adopted on 24 April 2021, repeal and replace previous European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019 and transpose parts of the Fourth and Fifth Anti-Money Laundering Directives.

The Regulations require trustees to hold accurate and current information in respect of a relevant trust’s beneficial owners and for certain information to be filed in a central register.

To what Trusts are the regulations relevant?

The Regulations apply to:-

• Express trusts established by a deed or other declaration in writing or by any other arrangement or class of arrangements as may be prescribed but do not include an excluded arrangement.

Excluded arrangements would include certain approved occupational pension schemes or approved retirement funds or revenue approved profit share schemes or employee share ownership trusts or a trust for certain restricted shares or such other arrangement as may be prescribed.

• Partnerships where any partnership interest is held in trust
• Trusts established for charitable and amateur sports purposes.
• Non EU resident trusts where the trust either enters a business relationship in the State, or acquires land or other real property in the State in the name of the trust.

How does it operate?

The Regulations require each EU Member State to establish a Central Register of Beneficial Ownership of Trusts (CRBOT). The purpose of the CRBOT is to help prevent money laundering and terrorist financing by improving transparency on who ultimately owns and controls Irish trusts.

The CRBOT is a standalone register that will contain details of relevant trusts and their beneficial owners. The CRBOT will be managed by Revenue, but Revenue’s role in managing the CRBOT is separate from its role in tax and customs administration and Revenue have stated that none of its records will be used to update the register. Each trust registered will be given a registration number for the purposes of the CRBOT alone, which will be separate to any tax registration number the trust may already have.

What are trustees obligations?

They must:-

1. take all reasonable steps to obtain and hold adequate, accurate and current information in respect of the trust’s Beneficial Owners;

2. establish and maintain a “beneficial ownership register” i.e. an Internal Register and is separate from the requirement to file with CRBOT. The Internal register must include:-

• name
• date of birth
• nationality
• residential address
• statement and nature of extent of interest held by each beneficial owner
• PPS Number (or passport/national identity card number for non residents)
• Date on which beneficial owner was added to the register and date person ceased to be a beneficial owner

3. register the information with CRBOT in respect of the beneficial owners of the trust and ensure that the information is correct and up to date;

4. give notice to any third party who they have reasonable cause to believe to be a beneficial owner of a trust or who has knowledge of the beneficial owner;

5. deliver any information of on change of the register to CRBOT within 14 days of receipt.

Beneficial Owners are the persons or entity who is the ultimate owner and benefits from the trustees holding the interest on their behalf.

Trustees need not obtain and hold the beneficial ownership information where the beneficial owner is a legal entity provided the trustee has basic information such as name, address, statement of interest held and any filing number assigned to the legal entity by the registrar of the relevant beneficial ownership register (i.e. beneficial ownership of companies and Industrial and Provident Societies).

What is the deadline?

• For trusts that were established on or before 23 April 2021, the registration deadline is 23 October 2021.
• For trusts created after 23 April 2021 these must be filed within 6 months of their creation.

What are Beneficial Owners required to do?

Individuals who know they are Beneficial Owners of a relevant trust or ought to reasonably know that they are one, must notify the Trustee of their status as a Beneficial Owner. They must provide details of their beneficial ownership to be added to the register and also notify Trustees of any changes in that status so that the register can be updated.

What are Competent Authorities required to do?

An Garda Siochána, Revenue Commissioners, Competent Authorities and Criminal Assets Bureau are obliged to report to the Registrar of CRBOT where discrepancies are identified between CRBOT and the internal register held by the Trust.

Who has access to CRBOT?

Trustees are required to grant access to information gathered on internal registers on request from any member of An Garda Siochána, the Revenue Commissioners, a Competent Authority or Criminal Assets Bureau. A Competent Authority includes the Central Bank and other State authorities prescribed under anti-money laundering legislation. CRBOT cannot be accessed by members of the public save for those who can demonstrate that they have a legitimate interest by way of submission to the Registrar of CRBOT.

Designated Persons under anti-money laundering legislation such as solicitors, auditors and property service providers will have certain restricted access to CRBOT where entering into a transaction with a trustee or forming a business relationship in order to carry out customer due diligence checks in relation to the relevant trust.

Offences

Failure to comply with the regulations is a criminal offence and liable to fine or imprisonment for up to 12 months.

Next Steps

Trustees, Beneficial Owners, Designated Person and Competent Authorities should seek further advice about their obligations under the regulations. Trustees in particular should be aware of the obligation to obtain information from Beneficial Owners and record in an internal register and secondly file the beneficial ownership information in CRBOT before 23 October 2021.

Trustees and Beneficial Owners should consider how the Regulations apply to them. For further information on this area, please contact Roisin Bennett at rbennett@reddycharlton.ie or your usual Reddy Charlton contact.