Will-writing reforms proposed

Signing Last Will and TestamentThe Law Commission of England and Wales is holding a public consultation on reform of the law of wills. The current law, largely derived from the Wills Act 1837, is understandably antiquated and requires an overhaul. The Commission notes that 40 per cent of people in England and Wales die without leaving a valid will, which often results in application of the unfavourable laws of intestacy.

Background

Significant changes in society, technology and medicine have prompted the Commission to review the wills law. Some of these factors include:

• the ageing population;
• the greater incidence of dementia;
• the evolution of the medical understanding of disorders, diseases and conditions that could affect a person’s capacity to make a will;
• the emergence of, and increasing reliance on, digital technology;
• changing patterns of family life – for example, more cohabiting couples and more people having second families; and
• with more people having substantial amounts of property, clarity about what happens to it after death being more important than ever.

Objectives

The Commission’s objective is to modernise and improve the current, archaic wills law. Some of the key focus areas include:

More flexibility: This would enable courts, when it is clear what the deceased wanted or intended, to dispense with the formalities of a will. If a particular formality, such as having two witnesses sign the will, had been overlooked or incorrectly administered, new ‘dispensing powers’ would enable the court to validate the will.
Capacity review: It may be necessary to improve the test for capacity to reflect the modern understanding of medical conditions such as dementia. This review could result in the introduction of a new test specifically linked to these conditions, where the testator makes a will with specific new guidance and support.
Statutory guidance: It may be necessary to introduce statutory guidance for doctors and other professionals when assessing whether or not a person has the required mental capacity to make a will. This could reduce the need for lengthy, costly litigation.
Undue influence: New rules should be considered to protect testators from being unduly influenced by another person. In particular, elderly and vulnerable testators should be better protected from fraud.
Testamentary capacity: Lowering the age at which a will can be made from 18 years old to 16. A child of 16 or 17 might have significant assets that he or she may not want to pass to an estranged parent under the rules of intestacy.
Electronic wills: It may be necessary to review how technology can be adapted in relation to making a will; it may become easier, cheaper and more convenient to a testator if they are able to do so electronically, though some practical challenges will need to be considered.
Ademption: The Commission would like to encourage discussions as to whether or not the ademption rules need to be reviewed. The rules could be improved to better align the testator’s wishes and intentions with the operation of the law.

Consultation events

STEP is working closely with the Law Commission and the Association of Contentious Trust and Probate Specialists (ACTAPS) on this consultation project. STEP is hosting free consultation events in London, Newcastle and Manchester, and STEP members are invited to provide feedback to Commission representatives.

Consultation event schedule:

London, 13 Sep
Newcastle, 18 Sep
• Manchester (tbc)

The consultation closes on 10 November 2017, and the Commission’s conclusions, along with its final recommendations and a draft Bill, are expected to be published in early 2018.

Emily Deane TEP is STEP Technical Counsel

Foreign domiciliaries – what next?

UK passport

Early in July, the UK government offered some clarity about what will happen to its proposed changes to foreign domiciliaries, which were dropped from the Finance (No.2) Bill 2017 in the rush to pass legislation prior to this year’s general election.

Following the election and the Queen’s Speech, a Ministerial Statement announced that, after the summer recess, everything that did not make it into the eventual Finance Act 2017 would be reintroduced in a second Finance Bill 2017.

Briefly, the main changes are:

  • If a person is born in the UK with a UK domicile of origin, and is resident in the UK during a tax year, he or she will be considered to be domiciled in the UK for all tax purposes.
  • Anyone who has been resident in the UK for at least 15 of the previous 20 tax years will be judged to be a long-term resident and domiciled in the UK for all of his/her tax purposes.
  • Inheritance tax will be extended to cover:
    • any UK residential property owned by foreign domiciliaries via a non-UK company or partnership;
    • any UK trust settled by foreign domiciliaries via a non-UK company or partnership; and
    • a loan, if the funds are used for the acquisition, maintenance or enhancement of an interest in UK residential property, as well as the collateral on such a loan.

Reliefs and protections

In addition, the government plans to introduce several accompanying reliefs and protections, including:

  • Capital gains tax (CGT) rebasing relief on assets held directly by individuals applying to income gains from non-reporting funds, as well as on capital gains on foreign assets.
  • A cleansing relief for individuals who have been remittance basis users in at least one tax year between 2008/2009 and 2016/2017 with mixed-fund bank accounts. This measure excludes formerly domiciled residents.
  • The protection of settlor-interested trusts, as long as the settlor is a long-term resident of the UK, through the continued disapplication of the capital gains tax anti-avoidance provision that would otherwise have levied a charge on the trust’s foreign income.
  • A small number of relaxations to Business Investment Relief.

The government has stated that there are no plans to alter the implementation dates of any of the measures. If they are passed, they will represent the most significant set of changes to the rules regarding foreign domiciliaries since 2008.

Time scales

Given that Parliament does not return until 5 September, rising on 14 September for the party conference season, it is unlikely that MPs will be able to properly debate the second Finance Bill 2017 before October. If so, the legislation would likely receive Royal Assent in late November – at the earliest.

Given the limited time MPs will have to debate and pass the Bill, and the important changes it will bring, STEP will carefully monitor developments as they happen, and provide updates on the legislation’s progress.

Daniel Nesbitt, Policy Executive, STEP 

STEP England & Wales Biannual Statement July 2017

Rita BhargavaIt is a pleasure to be writing to you for the first time as Chair of STEP’s England & Wales Regional Committee to let you know about the work we are doing on behalf of members in the region.

We’ve been performing well, with 93% of member renewals for 2017 received and 350 new members in the last six months. We’ve also seen more than 100 enrolments on STEP’s England and Wales Diploma in that time.

From a practice perspective, the recent political turmoil has impacted on our sector in various ways. Two issues of note were the draft legislation on the taxation of non-domiciliaries and offshore trusts and the probate fees debacle – both of which placed enormous strain on practitioners. STEP has been active on both fronts on behalf of members and their clients.

Finance Act 2017
The proposed changes to the UK’s taxation of non-domiciliary rules, which were due to come into force on 6 April 2017, were extremely complex and left a number of areas of uncertainty, which STEP’s UK Technical Committee highlighted to HMRC. The answers received were then collated in a Guidance Note for members’ information. However, the proposed changes were dropped from Finance Bill 2017 (now Finance Act 2017) to enable the bill to get through Parliament ahead of the General Election.

We’ve now heard that the proposed changes will resurface in a new Finance Bill after the Summer Recess, and will be backdated to 6 April 2017. This brings some welcome certainty, but it should not be forgotten that there are further changes on the horizon for non-doms and offshore trusts, which may be brought in later this year or next, so any planning will need to factor these in.

Probate fees
The proposed increase in probate fees announced earlier this year placed a huge strain on both probate registries and practitioners as everyone struggled to be ready for the May deadline. STEP was extremely active on this issue from the outset, expressing concern about the fairness, practicality and legality of the proposed increase, and obtaining a legal opinion from Richard Drabble QC, which stated that an increase in fees on the scale suggested could not be achieved without fresh legislation. You can read an overview of STEP’s activity here.

When the probate fee increase was put aside ahead of the General Election, we all breathed a sigh of relief. But we are not out of the woods yet: rumour has it that this may resurface, and we are keeping a close eye on the situation.

Public awareness
Politics aside, a lot has been happening at STEP in recent months.

It was great to see the launch in May of a new campaign to raise awareness of STEP and TEPs among UK consumers. A key part of this is the launch of www.advisingfamilies.org – a public-facing website providing information on issues relating to the services STEP members provide. It’s backed by a digital campaign – ‘You can talk to a TEP’ – to raise awareness and drive people to the website.

Many members and their firms have got involved, contributing content and engaging with the campaign on social media. If you haven’t yet had a look at the website, I’d recommend you do so. You can read more about the campaign and how to get involved here.

Speaker Register
Work has also been underway to develop a Speaker Register, which branches and central event organisers will be able to use to find speakers for their events. This exciting new development offers members the opportunity to put themselves forward for speaking opportunities. More than 300 members have already registered their interest in speaking via their Online Profile, so if you want to feature on this, make sure you register today.

So – a busy six months; with lots more to come, no doubt, as the year progresses. I look forward to reporting on that in December, but for now I hope you get at least a little respite over the summer to recharge for what’s ahead.

Rita Bhargava TEP
Chair, STEP England & Wales Regional Committee

Are you prepared for the UK’s new corporate criminal offence?

HandcuffsSTEP advised members earlier this year that the Criminal Finances Act 2017 received Royal Assent on 27 April 2017. The Act contains the new corporate criminal offence of ‘failure to prevent the facilitation of tax evasion’, which is anticipated to take effect in September 2017.

Even though tax evasion and facilitation of tax-related crimes are already criminal offences, it has previously been difficult to pin these offences on a corporation or partnership such as a law firm. The new legislation will create a liability on the employer for the actions of its employees and ‘associated persons’ who knowingly facilitate any tax evasion. The definition of ‘associated person’ is very wide in scope and will include employees, partners, consultants and also agents and anyone performing services for or on behalf of the company or partnership.

The Act applies to LLPs and partnerships as well as companies. It does not alter what is criminal but who should be liable for the criminal act.

There are three elements to the new offence:

1. The criminal UK or non-UK tax evasion by a taxpayer under the current law.

2. The criminal facilitation of this offence by an associated person acting on behalf of the company.

3. The company failed to prevent the associated person from committing the criminal act at stage two.

The legislation creates two new offences – a UK offence and an overseas offence. If a UK tax offence is committed then it is irrelevant if the company or associated persons are not UK-based. In accordance with the new legislation, the offence will have been committed and can be tried in the UK courts. This stance reinforces the UK’s position that any individual can be guilty of a UK tax evasion offence, regardless of their location, if they assist someone else to evade UK tax.

If non-UK tax is evaded then the company will be liable for the offence if they have a place of business in the UK, or if any of the facilitation took place in the UK.

Defence

There will be a defence available if the employer put in place reasonable prevention measures, but otherwise the offence is strict liability, and the employer may face criminal prosecution, financial penalties and reputational damage. A reasonable prevention procedure is one that ‘identifies and mitigates its tax evasion facilitation risks’ which will make prosecution more unlikely.

Advice for members

HMRC’s draft guidance dated October 2016 provides six guiding principles that companies should consider when interpreting the new legislation:

Risk assessment

Companies should assess their own risk exposure level in relation to their employees engaging in the facilitation of tax evasion in the course of business. The guidance notes that the bodies most affected by the new offence will be those in financial services, including the legal and accounting sectors. These bodies are advised to review the following additional guidance: The Financial Conduct Authority’s (FCA) guide for firms on preventing Financial Crime, the Law Society’s Anti Money Laundering Guidance, particularly Chapter 2 and the Joint Money Steering Group (JMLSG) guidance.

Proportionality of risk-based prevention procedures

It is anticipated that relying upon existing in house anti-money laundering procedures will not be sufficient to satisfy the defence of having prevention procedures in place. The guidance explores some of the varying common elements that would be considered to be reasonable prevention procedures.

Top level commitment

The top level management of each company should be committed to raising awareness and establishing safeguards intended to prevent the facilitation of tax evasion amongst its employees. Procedures include communication and endorsement of the new legislation within the company, as well as development and review of prevention procedures.

Due diligence

The company should mitigate any risks that it identifies by way of applying advanced due diligence procedures. The guidance notes that bespoke financial or tax related service companies will face the greatest risk, and that merely applying existing procedures will not be an adequate response to mitigating their exposure. New procedures are expected to be applied clearly in conjunction with the new legislation.

Communication (including training)

The company must ensure that its new prevention procedures are widely communicated and understood through internal and external communication with all employees. This communication may vary depending upon the size of the company, however training must be provided, and a zero tolerance policy for facilitation of tax evasion and its consequences must be properly communicated.

Monitoring and review

The company must put in place ongoing monitoring mechanisms and reviews to ensure that the system is effective, and it must make improvements where necessary. The company may choose to have reviews conducted by internal or external parties.

While HMRC’s guidance contains some useful terminology and case studies, it is recognised that further guidance is needed in this area. We understand that HMRC is working with industry bodies to support them in producing more specific guidance and STEP will keep you updated accordingly.

Emily Deane TEP is STEP Technical Counsel

MoJ in special measures on charges?

Businesman blows whistle and shows red card
STEP was one of the bodies most actively engaged in the furore that developed around the Ministry of Justice’s (MoJ) proposal to raise probate fees for some estates from £155/215 to as much as £20,000.

One of the things that enraged many STEP members was not just the scale of the increase, but the fact that overwhelming criticism in response to the consultation on the proposals had been entirely disregarded. Moreover, the mechanism by which the MoJ were looking to introduce the new fee – via a Statutory Instrument with minimal Parliamentary scrutiny – appeared to be a clear abuse of process; a view confirmed by a legal opinion commissioned by STEP.

In the end, the increase in probate fees appears to have been shelved, at least for the time being. It has recently emerged, however, that it is not just probate fees that have been getting the MoJ into a spot of hot water. Fees for Powers of Attorney were also raised to levels that more than covered costs, but the MoJ had again failed to follow the procedures needed in these circumstances. Fees for Powers of Attorney have since, with effect from 1 April 2017, been reduced, and the Office of the Public Guardian is looking at ways to refund those who have paid too much. (See Justice ministry to repay GBP89 million of powers of attorney overcharges.)

Even more intriguingly, the MoJ, in its Annual Report, has let slip that it is ‘undertaking a review of lessons learnt [from the Powers of Attorney fees issue] which has led to the creation of a new income strategy unit which will oversee the standards and controls set for all income streams.’

The Report goes on to say: ‘There have also been a number of improvements to the way in which we forecast and monitor fees to ensure compliance with requirements set by HM Treasury.’

Stripping through the civil service code, this sounds like there has been fairly sharp exchange of views between HM Treasury and the MoJ over fees that begin to look like taxes, with Treasury no doubt highlighting that there are supposed to be rules and procedures when it comes to this sort of thing.

The funding gap left by the failure to get the probate fee increase through before the election still needs to be addressed. How the MoJ will eventually fill that gap remains to be seen. It sounds, however, like we can at least expect the MoJ to pay a bit more attention to due process when this issue next comes up than it was minded to earlier this year.

George Hodgson is Chief Executive of STEP

Happy 25th birthday STEP Jersey!

George HodgsonI had the pleasure of attending STEP Jersey’s AGM and 25th anniversary celebration this week. STEP Jersey is one of our largest branches, with over 1200 members, and is also one of our most active. Not only does it host many well-attended events, but it works closely with government, regulators and others to ensure the jurisdiction maintains its position as a respected international financial centre.

Indeed it is fair to say that STEP Jersey plays an integral and important role in the economic life of the island, with the trust industry one of the largest local employers.

Much of the discussion focused on how to ensure that STEP, both locally and internationally, could maintain the success of its first quarter century well into the next. In conversations over a most enjoyable traditional cream tea (with the welcome, but less traditional, addition of a glass of Prosecco) I was struck by the confident tone of many senior professionals who were present.

They fully acknowledge the challenges that increased transparency and a consequent explosion in compliance costs will bring. Rather as with Brexit in the UK, however, the mood was generally ‘what is done is done – so let’s get on with it.’

I am delighted to see that STEP Jersey is setting up a policy-focused committee to ensure there are effective links with local regulators and others to work through the rapid changes now underway.

The team at STEP Worldwide will continue to give STEP Jersey (and other branches working on these issues) all the support we can in helping develop a coherent and well-informed strategic approach to the trust industry in the new age of transparency.

George Hodgson is Chief Executive of STEP

Embracing a new skills agenda

EPP forumThese days, the world seems to be changing faster than it spins on its axis. While the headlines darken each morning with geo-political and economic tumult, the sense of unease continues reading beyond the front pages. A bleak outlook for the workplace: robots will take over, professions will be rendered obsolete by new technology; a Fourth Industrial Revolution is less than a mouse-click away…

Participants in a global economy, we are available 24:7. How can we thrive in these modern times? Where do we find breathing space? How can organisations find time to develop its staff without taking them from business as usual activities? How can individuals cultivate a work-life balance or reflect on their place in the world?

Such questions were posed by the STEP Employer Partnership Programme’s inaugural Summer Forum last week in London. Hosted by BDO, the evening included high-profile speakers drawn from the trusts and estates industry and the learning and development world to explore these issues. Participants were given a powerful call to action to embrace a new skills agenda and innovate in their practice.

BDO’s Head of Private Client UK, Paul Ayres, opened the programme. Reflecting on the changing role of the tax practitioner, his observations will resonate with contemporaries in the tax world as those in other professional services:

How can your organisation meet changing client requirements? How do you promote yourself in a world that increasingly denigrates the value of professional advice as the internet perpetuates the fallacy that everyone can be an expert? How can you make an agile response to constantly changing governmental and regulatory constraints? How can you keep ahead of legislation, embrace technology, maintain global competitiveness and deliver your services at the right price point? How do you retain your trainees, who are entering the workforce now with very different expectations of work from their supervising partners? How do you give the same quality of training you experienced, when the advent of digitisation has rendered obsolete the opportunities to develop the practical and client-care skills embedded in the training contracts of old?

Leading learning and development specialists Liggy Webb, Jonathan Winter and Jane Hart gave impassioned responses as to how we interpret these challenges. We all wish to be more flexible and confident in the way we approach challenges in life, both at work and at home. Liggy Webb delivered strategies for resilience – emotional sunscreen to help us confront those challenges head on and keep us sane.

Jonathan Winter discussed how careers really work, blowing away the cobwebs on the traditional model of the career trajectory that most have entered the workplace with, debunking myths about how we think about work and leaving us with seven habits crucial to future-proof a career.

Jane Hart, closing the programme, addressed the changing world of work and urged delegates to embrace new technologies, adopt learning tools and strategies that embed a culture of learning within individual, team and organisational outputs. Drawing on examples of pioneering practice from players like Google, she deftly illustrated how this can be done without the onerous burden on budgets human resource training often presents. A lively Q&A offered a stimulating debate on these ideas.

By the close of the evening it was clear that those employers who adopt a proactive approach to change and empower their employees similarly will thrive. Those investing time, as well as financial and intellectual capital into their workforces will reap the land of plenty in the future. Embracing new models of learning and working, and viewing technology as an enabling force, not a threat, will help them withstand the social seismic shifts and lead the new skills agenda for the modern workplace.

Madeleine Jenness, STEP Education Manager

Information exchange reporting FAQs

Emily Deane TEPWith reporting now underway in the UK for both FATCA and the Common Reporting Standard (CRS), STEP has been liaising with HMRC on some of the finer points of reporting.

Can I still submit CRS amendments?

There is some time available following the 31 May 2017 deadline for submission of amendments or corrections. If you need to submit an amendment within the first few weeks of filing then HMRC should be able to include the amendments in the first exchange scheduled for 30 September and the information will be sent to the relevant jurisdiction.

What are the penalties for late CRS reporting?

HMRC has confirmed that they will take a soft approach towards penalties in the early stages of CRS (like FATCA, the US Foreign Account Tax Compliance Act ) – particularly if there are CRS system errors that incur late filing. However, a harder approach may be taken towards people who are deliberately negligent with their filing.

FATCA: what do I do if a US TIN is unavailable?

It has previously been identified that in some cases a nine-zero approach will be accepted when a TIN (Taxpayer Identification Number) is unavailable. Some accounts are being filed with missing TINs which causes difficulties because the system will respond that it has been submitted in an incorrect format. The ‘missing TIN’ cases are inevitably causing issues for users and HMRC and HMRC is waiting for feedback from the IRS later this year on how to resolve it. It may be deemed acceptable that the nine-zero approach continues in the short term.

I have received a FATCA renewal message, what do I do?

If you have received a FATCA renewal message for an FI (Financial Institution) from the IRS then you will need to login, check that renewal is not required and confirm that. For further information see p 84 of FATCA Online Registration, which says ‘FIs notified of the potential need to renew their agreement should login to the FATCA Online Registration System and view the ‘Renewal of FFI Agreement’ page … FIs must determine if they need to renew their agreement and then must submit their determination … All FIs should follow steps 1 through 4 below to determine if they must renew their agreement’.

What is the deadline for client notification?

The UK Client Notification Regulations came into force on 30 September 2016. The obligation for practitioners to notify any clients with offshore accounts and assets that HMRC will soon begin to automatically receive data from over 100 jurisdictions relating to UK tax residents and their offshore accounts, in accordance with the UK’s automatic exchange of information agreements, must be met by 31 August 2017. See this STEP blog for more information.

STEP will continue to consult with HMRC on ongoing technical issues.

Resources:

Emily Deane TEP is STEP Technical Counsel

CRS reporting update, June 2017

Emily Deane TEPSTEP attended the most recent CRS Business Advisory Group hosted by HMRC and discussed the following issues:

FAQs

HMRC advised that new documents on the OECD portal have been published along with some additional FAQs.

Anti-avoidance

Members were interested to know when the OECD will publish its loophole paper which will review loophole reporting strategies.

HMRC advised it does not expect imminent changes to the OECD’s anti-avoidance strategy but does expect a review prior to that planned in 2019.

In the meantime, the OECD has launched a facility for parties to disclose CRS schemes which are potentially used to circumvent CRS reporting.

US TINs – invalid format

The number of the US Taxpayer Identification Number (TIN) to be submitted has to be in a certain format, otherwise the return will be rejected.

In some cases a nine-zero approach will be accepted but some accounts with missing TINs are causing difficulties having been submitted in an incorrect format. The ‘missing TIN’ cases are inevitably causing issues for users and HMRC. Members agreed that there will be problems next year when the nine-zero approach will no longer be accepted.

HMRC recognises these difficulties and has been liaising with the IRS regarding the TIN issues. A member also mentioned that the issue was being raised by industry groups in EU circles.

Invalid self-certifications

Members agreed that HMRC’s guidance is ambiguous if a self-certification is returned to the financial institution but contains errors. For example, would HMRC accept a self cert that had been returned, but not signed, in a time sensitive case?

HMRC declined to generalise on self-certification issues, stating that each example has to be judged on its own specific issues. It confirmed that it is up to the financial institution to decide whether it is satisfied that a person is non reportable. The financial institution should apply due diligence procedures based on guidance and common sense.

The mediation period and the cut off timing were also discussed. HMRC stated that it is up to the individual financial institution’s procedures as to the cut off. It was agreed that it can be a grey area with some contradictions, and in some cases the financial institution may need to decide whether a person is reportable, whilst the validation is undertaken. More clarity on this issue was requested from HMRC.

HMRC customer support

HMRC has been receiving increasing numbers of calls from clients of financial institutions, rather than the financial institutions themselves. This is causing problems, particularly when close to filing dates. As a result, HMRC has asked financial institutions to omit its contact details from notes that accompany the self-certifications, stating these are not relevant to clients and it does not have the resources to deal with additional queries.

STEP will continue to attend the periodic working group to discuss ongoing technical issues with HMRC.

Resources:

STEP Guidance Note: CRS and trusts
Live STEP webinar on ‘CRS and Trustees’ with John Riches TEP and Samantha Morgan TEP, 13 June

 

Emily Deane TEP is STEP Technical Counsel

EU AMLD: where are we now?

Emily Deane TEPOn 21 March 2017, the first political trilogue on the Commission proposals to amend the 4th Anti-Money Laundering Directive (4AMLD), proposed in July 2016, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing took place at the European Parliament (EP).

In the wake of the ‘Panama Papers’ scandal the Commission has been intent on cracking down on the hiding of illicit funds by adopting a coordinated approach at both EU and international level.

The EP, Commission and Council have expressed their willingness to engage in negotiations with a view to a swift agreement, and the EP stressed the importance of transparency in fighting money laundering.

Beneficial ownership debate

STEP has concerns about some of the proposals to amend the Directive. In particular, the requirement for member states to set up publicly accessible central registers for the mandatory registration of the beneficial owners (BO) of all trusts (not just those with tax consequences), and similar legal arrangements (Articles 30-31).

The general consensus of the majority of member states is that the BO information on these registers should be publicly accessible. STEP is arguing that a publicly accessible register is likely to infringe data protection rights, the right for private and family life guaranteed by Article 7 of the EU Charter of Fundamental Rights, and Article 8 of the European Convention on Human Rights.

Publishing details of beneficiaries, particularly vulnerable beneficiaries, would leave them seriously exposed to potential abuse, given the risk of such information falling into the wrong hands and being disseminated for illegitimate purposes.

The state of negotiations:

• The definition of the BO of a company or trust remains in dispute.
• There are questions whether the information on the registers should be publicly accessible and if not, who should be granted access?
• Should registration of a BO be required where the activities are carried out, or where the entity is owned?
• MEP Judith Sargentini is hoping to reduce the threshold for the identification of a BO from 25% to 10% ownership. The Commission continues to state that this should only be the case if it’s a high-risk entity.

The trilogue parties intended to reach an agreement by the end of the Maltese Presidency on 30 June 2017, but the EP has stated it will be difficult to conclude it by then. Estonia takes over the Presidency on 1 July.

The next meetings are on 29 May, 7 June, 28 June 2017.

4AMLD – UK’s obligations

In the meantime 4AMLD implementation into national law is required by 26 June 2017.

The UK’s newly published draft of the Money Laundering Regulations 2017 will be its instrument to transpose the directive. This will revoke and replace the Money Laundering Regulations 2007.

The UK is required to implement a central register of trusts on 26 June, which will apply to worldwide trusts with UK assets that generate a tax consequence. The Directive leaves it to each member state to decide the level of transparency to be applied and the UK has confirmed that access to this register will be limited to law enforcement agencies on the grounds of privacy (see HMRC consultation on 4AML implementation).

The corresponding German bill has faced scrutiny at the committee stage whereby some of its members were pushing for full public access but other members have rejected a fully public registry of company and trust beneficial ownership. The bill will be subject to revision before it is enacted but it is unlikely that public access will be granted.

STEP will continue to monitor the progress on 4AMLD and the revised Directive and keep members updated accordingly.

 

Emily Deane TEP is STEP Technical Counsel