The Central Register of Beneficial Ownership of Trusts: A New Regime for Trustees

Background

The European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2021 (the “Regulations”) are in force in Ireland since 24^th April 2021. The Regulations, which form part of a larger European led anti-money laundering framework, will impose new filing obligations on the trustees of Irish trusts which up until now would have faced little outside scrutiny. The purpose of the Regulations, as described by the Revenue Commissioners, is to improve transparency on who ultimately owns and controls Irish trusts and effectively extends the reporting beneficial ownership obligations which apply to companies so that they also apply to trusts.

While trustees have had to maintain an internal register since 2019 this information will now have to be shared with the Revenue Commissioners via the recently opened Central Register for Beneficial Ownerships of Trusts (“CRBOT”).

With the filing date of 23^rd October 2021 fast approaching for existing trusts in this briefing note we outline what trustees need to know and need to do to make sure that they comply with the new obligations imposed upon them.

What Trusts are Affected?

The Regulations require a “relevant trust” to file beneficial ownership information with the CRBOT and ensure that this information is correct and up to date.

A “relevant trust” is defined as:

1. A trust whose trustees are resident in the State,
2. A trust which is administered in the State, or
3. A trust which has a business relationship in the State or acquires land or other real property in the State.

Express trusts established by deed or other declaration in writing and any other prescribed arrangement or class of arrangements will come within the scope of the Regulations. While certain arrangements are expressly excluded, such as pension trusts, it is clear that the definition is very broad and has the potential to capture most trust arrangements which have connections with Ireland.

FAQs published by the Revenue Commissioners state that a trust will be considered to be administered in the State when management of its assets or other services, provided by legal or accounting professionals or other trust service providers are rendered to the trust by such professionals operating in the State.

Where a trust is administered in more than one EU Member State (or where two or more of its trustees reside in different Member States) specific rules apply so that a duplication of filings need not occur provided evidence of filing in the other Member State can be provided.

What must a Trustee Do?

Where a trust is within the scope of the Regulations, its trustees must:

• Take “all reasonable steps” to obtain and hold adequate, accurate and current information in respect of the trust’s beneficial owners;
• Establish and maintain a “beneficial ownership register” for the trust. This Internal Register is separate from the requirement to file with CRBOT; and
• File information with CRBOT in respect of the beneficial owners of the trust within the prescribed timelines and ensure that the information is correct and up to date and reflects any changes in beneficial ownership which may arise.

Who is a “Beneficial Owner”?

The Regulations define a “beneficial owner” of a relevant trust as:

1. 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 relevant trust property;
2. in the case of a relevant trust other than one that is set up or operates entirely for the benefit of individuals referred to in subparagraph (a), the class of individuals in whose interest the trust is set up or operates;
3. any individual who has control over the relevant trust;
4. the settlor;
5. the trustee;
6. the protector.

Again, this definition is very broad and while it may be clear in many cases who the beneficial owners will be in certain cases this may require further consideration given that concepts like control play a part in identifying a beneficial owner for this purpose.

Trustee Obligations - Information to be held on an Internal Register

The information that must be collected and maintained on an internal register maintained by the trustees in respect of each beneficial owner of a relevant trust is detailed at Schedule A below.

Trustee Obligations - Information to be filed with the CRBOT

Separate to the internal register, the information which a trustee must file with the CRBOT in respect of each beneficial owner of a relevant trust is detailed at Schedule B.

Filing Deadlines

Specific filing deadlines apply to trusts depending on the date that they were established:

Trusts established on or prior to 23 April 2021 must register with CRBOT prior to 23 October 2021;

Trusts established after 23 April 2021 must register with CRBOT within 6 months of their creation.

Trustees can register through ROS, or opt to have their agents, advisors, or employees do so on their behalf. Where the filer is an individual who does not have a business tax registration number, they can instead file through their MyAccount.

Penalties

A trustee who fails to comply with the Regulations is deemed to commit an offence and shall be liable to fines of up to €500,000 and / or imprisonment of up to 12 months depending on the offence.

Accessing the CRBOT

The Regulations allow certain persons differing levels of access to the information contained on the CBROT.

Certain “competent authorities” will have unrestricted access to CRBOT. These authorities include An Garda Síochána, the Revenue Commissioners, and the Criminal Assets Bureau.

Certain “designated persons” will be granted restricted access to CRBOT. These include credit and financial institutions, auditors and tax advisors.

Members of the public may be granted restricted access to the CRBOT, provided that they can demonstrate a “legitimate interest” and satisfy other requirements prior to such access being granted.

Conclusion

With the Regulations now in full effect and CRBOT open for registrations, trustees of existing and newly-formed relevant trusts should be taking the following steps to ensure their compliance with the new reporting regime:

• Review their trust arrangements and determine whether their trust falls within the scope of the Regulations;
• Review their internal register of beneficial owners to ensure compliance with the requirements of the Regulations. Trustees should ensure that the information contained within this internal register is accurate and up to date.
• Ensure their CRBOT filing requirements are met ahead of the 23 October 2021 or 6 month deadline as appropriate.

If you are a charitable trust, a sporting body trust, a trust set up under a will which has come into effect or a foreign trust with Irish assets you have a small window to ensure that the new reporting obligations imposed upon you by the Regulations are satisfied.

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SCHEDULE A

Trustee Obligations - Information to be held on an Internal Register

The information that must be collected and held on an internal register maintained by the trustees in respect of each beneficial owner of the trust where the beneficial owner is an individual is as follows:

• Name,
• Address,
• Date of birth,
• Nationality,
• PPSN (where resident in the State),
• Foreign tax registration number, passport number or national identity number where the beneficial owner does not have a PPSN and is not resident in the State,
• Statement of the nature and extent of the interest held or control exercised,
• Date on which the beneficial owner was entered onto the internal register, and
• Date on which the individual ceased to be a beneficial owner.

Where the beneficial owner is a legal entity, with a filing in an Irish or EU central register, the trustee must obtain and hold the following information on an internal register in respect of that entity:

• Name of the legal entity,
• Registered address of the legal entity,
• Name of the central register on which the legal entity appears,
• Filing number of the legal entity on the central register, and
• Statement of the nature and extent of the interest held or control exercised by the legal entity in relation to the trust;

Where the entity is not obliged to register with an Irish or EU central register, the trustee is obliged to “look through” the entity and obtain and hold information on the individuals who are the beneficial owners in respect of that entity.

SCHEDULE B

Trustee Obligations - Information to be filed with the CRBOT

Separate to the internal register, the information which a trustee must file in respect of each beneficial owner who is an individual with the CRBOT ahead of the relevant filing deadline is as follows:

• Name,
• Address,
• Date of birth,
• Nationality,
• Country of Residence,
• PPSN (for verification purposes only, the number will be stored securely by the Revenue Commissioners but not be included on the CRBOT), and
• Foreign tax registration number, passport number or national identity number where the beneficial owner does not have a PPSN and is not resident in the State, (again this number is to be provided for verification purposes, will be stored securely but not to be included on the CRBOT), and
• Statement of the nature and extent of the interest held or control exercised by that individual

Where the beneficial owner is a legal entity registered on another central register either in Ireland or the EU the trustee must file the following information with the CRBOT:

• Name of the legal entity;
• Registered address of the legal entity,
• Name of the central register on which they are registered;
• Filing number on the central register, and
• Statement of the nature and extent of the interest held or control exercised by that legal entity.

Where the entity is not obliged to register with an Irish or EU central register, the trustee is obliged to “look through” and file the details of the individual beneficial owner in respect of that entity as outlined above.