With all eyes this week on the launch (on 1 August) of Companies House's Register of Overseas Entities, we revisit the question of the extent to which information held on both the Register of Overseas Entities and the UK trust registration service (TRS) maintained by the UK Revenue (HMRC) is publicly accessible, following recent developments.
In our recent article we explained that information on the TRS about a trust which you set up, or of which you are a beneficiary, will always be available to HMRC and other law enforcement authorities in the UK but whether that information is accessible by others will depend on a number of factors, in particular the residency of the trustees. HMRC has now published details of its policy on responding to third-party information disclosure requests (trust data requests or TDRs), which can be made, via an online form, from 1 September 2022.
HMRC has clarified in its published guidance that TDRs cannot be made in respect of all trusts and that, in particular, trusts registered only because of a liability to UK taxation are not to have their details disclosed. This includes non-UK trusts (with no UK trustees) that are registered only because they have acquired real property in the UK. Furthermore, even where TDRs can be made, HMRC will not disclose information on specific individuals if exemptions apply to them, for example those under 18 or lacking mental capacity, or where releasing the information might produce a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation. Trustees must notify HMRC (at a designated email address) where a particular beneficiary is at risk of harm, in order for HMRC to be aware of the issue.
Where TDRs can be made, an applicant (referred to as a 'requestor' in the guidance) needs to demonstrate a legitimate interest in the requested information unless (as mentioned in our earlier article) the trust holds a controlling interest in a non-EEA entity. HMRC have confirmed that where access to information on the TRS is subject to a 'legitimate interest' requirement, an applicant must demonstrate that they are looking into a specific instance of money laundering or terrorist financing in relation to a specific trust and that the information on the register which is requested will further that investigation. Where a legitimate interest is not adequately demonstrated, then HMRC will not share the information on the register. This will be the case where:
- the applicant is not requesting data in order to further an investigation into a specified instance of money laundering or terrorist financing;
- where the information provided by the applicant does not sufficiently show reasonable grounds for suspicion of money laundering or terrorist financing on the specific trust to which the request relates; or
- where the information does not identify adequately a specific trust.
With regard to trusts holding a controlling interest in a non-EEA entity, HMRC's guidance now states that HMRC is obliged to release the relevant information and TDRs are not restricted to specific cases of money laundering or terrorist financing. However, the request must still be sufficiently particularised in relation to a specific trust, rather than in relation to persons.
Where a TDR is granted, the data disclosed will be limited to the beneficial owners that are associated with the trust. For individuals, this includes name, month and year of birth, country of residence, nationality and role in the trust. For companies and other legal entities, the information will be restricted to name, office address and role in the trust.
The relatively limited public access to information held on the TRS is in contrast to the position for the Register of Overseas Entities, which is accessible by anyone, subject only to a protection regime. This protection regime was detailed in secondary legislation made (in the form seen in draft the month before) on 25 July 2022, which came into force on 1 August 2022. This regime is similar to the one which applies to the UK register of beneficial owners of companies (the PSC register) and it will allow individuals who are (or used to be) registrable beneficial owners or managing officers of overseas entities to apply to have their information made unavailable for public inspection and not subject to disclosure by the register (in certain circumstances) where they can provide evidence that the entity's activities - or one or more of their characteristics or personal attributes when associated with that entity – will put them or someone living with them at serious risk of violence or intimidation.
This article is not intended to constitute advice.
