The regulations in relation to registers of beneficial ownership and registration of trusts apply to any trust whatsoever established by deed or other declaration in writing and any other arrangement or class of arrangements as may be prescribed.
The following trusts and schemes which arise under tax legislation are excluded
- an occupational pension scheme that is an approved scheme
- an approved retirement fund
- a profit-sharing scheme or employee share ownership trust approved
- a trust for restricted shares within the meaning of section 128D of the Act of 1997;
- the Haemophilia HIV Trust which was established by deed dated the 22nd day of November 1989, made between the Minister for Health, of the one part and certain other persons of the other part;
- a unit trust the beneficial ownership of which, is required to be registered in the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts;
- such other arrangement or class of arrangements as may be prescribed.
Prescribed Exclusion Power
The Minister for Finance may prescribe any arrangement or class of arrangements to be an excluded arrangement taking into consideration
- the low risk of money laundering or terrorist financing presented by such arrangement or class of arrangements having regard, in particular, to the legal structure of such arrangement or class of arrangements; any supervision or regulation of such arrangement or class of arrangements under any enactment, and
- the non-application or application of the Fourth Money Laundering Directive to arrangements in other Member States having comparable purposes and structures to such arrangement or class of arrangements.
Beneficial Owner Meaning
The definition of a beneficial owner under money laundering regulations is very wide. It includes beneficial owners under the trust but also the trustees themselves and the persons creating the trust. The term is liable to cause confusion given that its defined meaning in this context is so radically different to the ordinary understanding of beneficial owners in the context of trusts.
A ‘beneficial owner’, in relation to a trust, means any of the following:
- any individual who is entitled to a vested interest in possession, remainder or reversion, whether or not the interest is defeasible, in the capital of the trust property;
- the class of individuals in whose interest the trust is set up or operates;
- any individual who has control over the trust;
- the settlor (the person creating the trust);
- the trustee;
- the protector (a person whose consent is required to key decisions).
Control as widely defined. ‘control’, in relation to a trust, means a power (whether exercisable alone, jointly with another person or with the consent of another person) under the trust instrument concerned or by law to do any of the following:
- dispose of, advance, lend, invest, pay or apply the trust property;
- vary the trust;
- add or remove a person as a beneficiary or to or from a class of beneficiaries;
- appoint or remove trustees;
- direct, withhold consent to or veto the exercise of any such powers
An individual does not have control solely as a result of the power exercisable collectively at common law to vary or extinguish a trust where the beneficiaries under the trust are at least 18 years of age, have full capacity and (taken together) are absolutely entitled to the property to which the trust applies.
Beneficial owner’, in relation to a trust established for the purpose of holding any assets of an approved body of persons established for, and existing for, the sole purpose of promoting amateur games or amateur sports means the trustees, the committee or other governing body of the club or association, and any other individual who has control over the trust.
Beneficial owner’, in relation to a trust that is a charitable trust within the meaning of section 2 of the Charities Act 2009 , means the trustees and the committee or other governing body of the charitable trust, and any other individual who has control over the charitable trust.
The definitions cover the executors of a deceased person while the estate is being administered.
The Regulations apply to a trust whose trustees are resident in the State or which is otherwise administered in the State. They also apply if none of the trustees of a trust are resident in the European Union and the trust is not otherwise administered in the European Union, if
- a trustee of the trust, when acting as trustee, enters into a business relationship in the State, or
- a trustee of the trust, when acting as trustee, acquires land or other real property in the State in the name of the trust,
The Regulations apply to the trust but only for so long as that business relationship subsists or that land or other real property continues to be so held by a trustee of the trust.
Obtain and Hold Information
A trustee of a trust shall take all reasonable steps to obtain and hold adequate, accurate and current information in respect of the trust’s beneficial owners, that is to say –
- the name, date of birth, nationality, and residential address of each beneficial owner of it,
- a statement of the nature and extent of the interest held, or the nature and extent of control exercised, by each such beneficial owner,
- the PPS number of each such beneficial owner to whom such a number has been issued, and
- in the case of a beneficial owner to whom a PPS number has not been issued and who is resident in a state, other than the State, any unique number issued to him or her, for the purpose of the administration of tax in that state, by an authority in that state, or his or her passport number or national identity card number and for the purpose of verification of either such number, a copy of the document, issued by the authority in the state concerned, containing such number.
Any PPS number obtained , any number, or copy of a document containing such number, obtained under that subparagraph, shall not be disclosed by the trustee required by the regulations.
As respects a legal entity (such as a company) that is a beneficiary of the trust the beneficial ownership of which is recorded, for the time being, in the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies, the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts or any register, corresponding to either of those foregoing Registers, in another Member State,
it shall not be necessary for the trustee of the trust to obtain and hold the information referred to as respects any individuals, constituted through that legal entity, as beneficial owners of the trust. This is provided the trustee holds the following particulars, namely –
- the name and registered address of the legal entity and a statement of the nature and extent of the interest held, or the nature and extent of control exercised by it, in relation to the trust, and
- any filing number assigned to the entity by, as appropriate, the Registrar of Beneficial Ownership of Companies and Industrial and Provident Societies, the Registrar of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts or the person who performs the functions of registrar or controller of the aforementioned corresponding register.
As respects a legal entity that is a beneficiary of the trust referred and which entity, the beneficial ownership of which is not recorded, for the time being, it shall be necessary for the trustee of the trust to take all reasonable steps to obtain and hold the required information as respects any individuals, constituted through that legal entity, as beneficial owners of the trust.
The trustee shall enter the information in the trust’s beneficial ownership register. This will generally also include
- the date on which each individual was entered into the register as a beneficial owner of it;
- the date on which each individual who has ceased to be a beneficial owner of it ceased to be such an owner.
Duty of Beneficial Owner to Notify
The following obligations apply to an individual if
- the individual is a beneficial owner of a trust,
- the individual knows that to be the case or ought reasonably to do so,
- his details are not stated in the trust’s beneficial ownership register,
- the individual has not been given a notice by the trustee above
- in the above circumstances have continued for a period of at least one month.
The individual concerned individual must notify, in writing, the trustee of the trust of the individual’s status (as a beneficial owner) of the trust. That notification shall state the date, to the best of the person’s knowledge, on which the person acquired that status, and the required information mentioned above.
An individual who fails to comply or in purported compliance makes a statement that is false in a material particular, knowing it to be so false or being reckless as to whether it is so false, commits an offence and shall be liable, on summary conviction, to a class A fine.
A beneficial owner individual has an obligation to notify a change in the details to the trustee where
- the individual knows of the change or ought reasonably to do so,
- the trust’s beneficial ownership register has not been altered to reflect the change, and
- the individual has not been given a notice by the trustee by the end of the period of one month beginning with the day on which the change occurred.
The notice to the trustees is the state the date on which the change occurred and give to the trustee any necessary information so that it can alter the trust’s beneficial ownership register to reflect that change. This obligation is to be complied with by the individual not later than whichever of the following periods is the last to expire –
- the period of 2 months beginning with the day on which the relevant change occurred,
- the period of one month beginning with the day on which facts have come to the notice of the individual from which he or she could reasonably conclude that the relevant change has occurred.
An individual who fails to comply with the obligation or in purported compliance with this Regulation makes a statement that is false in a material particular, knowing it to be so false or being reckless as to whether it is so false, commits an offence and shall be liable, on summary conviction, to a class A fine.
Offence for failure to comply
A person to whom the above formal notice is given commits an offence if the person – fails to comply with the notice, in purported compliance with the notice, makes a statement that is false in a material particular, knowing it to be so false or being reckless as to whether it is so false.
A trustee of a trust shall keep and maintain a register (which is known as the “beneficial ownership register”) in which there shall be entered by the trustee the details of the beneficial owners mentioned above (name date of birth and nationality address nature and extent of interest nature of control PPS or foreign equivalent)
A trustee who fails to comply commits an offence and shall be liable on summary conviction to a class A fine, or on conviction on indictment, to a fine not exceeding €500,000.
Correction of Register
- the name of any person is, without sufficient cause, entered in or omitted from a trust’s beneficial ownership register, or
- default is made or unnecessary delay takes place in entering in a trust’s beneficial ownership register the fact that a person has ceased to be a beneficial owner of it,
the person aggrieved or any other interested party may apply to the High Court for rectification of the register. Where an application is made, the High Court may either refuse the application or may order rectification of the beneficial ownership register and payment by the trustee of compensation for any loss sustained by any party aggrieved.
On such an application, the High Court may –
- decide any question as to whether the name of any person who a party to the application is should or should not be entered in or omitted from the beneficial ownership register, and
- more generally, decide any question necessary or expedient to be decided for rectification of the beneficial ownership register.
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