Money laundering supervision for trusts or company service providers
Find out if you’re a trust or company service provider who needs to register with HM Revenue and Customs (HMRC) under Money Laundering Regulations.
Who should register
You’ll have to register with HMRC under the Money Laundering Regulations if your business is a trust or company service provider, unless you’re already supervised by another body.
Under the Money Laundering Regulations a trust or company service provider is any company or sole practitioner whose business is to:
- form companies or other legal persons
- provide a registered office, business address, correspondence address or administrative address for a company, partnership, or other legal person or arrangement
act, or arrange for another person to act as a:
- director or secretary of a company
- partner (or in a similar position) for other legal persons
- trustee of an express trust or similar legal arrangement
- nominee shareholder for another person, unless the other person is a company listed on a regulated market which is subject to acceptable disclosure requirements
Arranging for someone to act
Arranging for someone to act in a particular capacity has a narrow meaning. An example would be if you provided a client with a company director, selecting them without further reference back to your client and completing some or all of the formalities to appoint them.
It doesn’t include the normal process of headhunting or advertising to find a suitable candidate for a position that a recruitment agency would carry out.
You only count as a director under the trust or company service provider rules if you’re:
- formally appointed as a director and your name is registered at Companies House
- a shadow director - you direct or control the business but you’re not named as a director
You’re not covered by the rules if you’re only called a director as part of your job title without being formally appointed.
An express trust is an arrangement where there is a clear intention to create a trust. An express trust is usually created by a written document (a trust deed).
Types of business that should register
You’ll have to register as a trust or company service provider if your business includes:
- company formation agents
- providing registered offices, business addresses, accommodation or correspondence addresses, or mail forwarding services to businesses (other than those run by sole proprietors)
any individual or company:
- providing nominee director services, nominee company secretary services or nominee shareholder services - or other similar services
- arranging for another person to act as a director, company secretary, partner or professional trustee
- offering professional trustee services (unless they relate to certain low-risk trusts)
- providing their services as nominee shareholder (unless they’re acting for a company whose securities are listed on a regulated market)
- any company providing their services as a company director, company secretary, or partner to another company (unless the other company is a member of the same group)
any individual providing their services as a:
- nominee director or nominee company secretary
- company director, company secretary or partner to certain high-risk businesses
Nominee services are used to keep the true ownership or control of a company confidential. Nominee directors and secretaries may do little to manage or administer the company, or they may play an active role (but acting on the instructions of others).
Nominee shareholders are the registered holders of the shares in a company but they hold them on behalf of others.
Low-risk trusts include:
- straightforward express trusts set up by a will that:
- create life interests for spouses or partners
- are for the benefit of people aged under 25, dependants or people with a disability, or that make provision for a charity
- express lifetime trusts created to manage the affairs of a person with a disability
- occupational pension schemes and employee share schemes
A discretionary trust isn’t a low-risk trust.
A company is a high-risk business if it operates in a:
- jurisdiction that has weak anti-money laundering systems
- high-risk sector
A business operates in a high-risk sector if:
- it carries out frequent cash transactions of €15,000 or more
- it’s a company operating in the UK but incorporated outside the UK in a jurisdiction that isn’t equivalent to the UK
- some of its share capital is held as unregistered bearer shares
An individual providing their services to a high-risk business doesn’t have to register with HMRC if that business is:
- already supervised under the Money Laundering Regulations
- a public authority
- a business authorised by a public authority to act on their behalf where the only customers are also public authorities
If you’re unsure, you’ll need to consider if you:
- undertake one or more of the activities of a trust or company service provider
- advertise or publicise your business activity, or receive referrals from other businesses
- aim to make a profit when you carry out this activity
- carry out the activity with reasonable or recognisable continuity
If you do all of these things then you’re carrying out the activity by way of business and you need to register with HMRC.
If you don’t do any of these things then you aren’t carrying out the activity by way of business and you don’t need to register with HMRC.
If you do some but not all of these things, and you’re still not sure, you can contact HMRC for guidance.
Who doesn’t need to register
You don’t have to register with HMRC if you’re:
- an individual employed by a company for which you act as a company director, company secretary or partner, as long as you’re not providing your services to a high-risk business
- an individual providing company director services, company secretary services or partner services to a business that’s already supervised under the Money Laundering Regulations
- an individual providing company director services, company secretary services or partner services to a public authority or to a business authorised by a public authority to act on their behalf where the only customers are also public authorities
- a trustee of a low-risk trust
- a recruitment and employment agency that only offers the normal business services of employment agencies in connection with the appointment of a company director, company secretary, partner or professional trustee
- a business that only rents out office premises or grants a right to occupy physical office space
- a will writer
If you provide your services through a personal service company then it’ll only be subject to the regulations if you’d have been subject to them yourself, provided:
- the personal service company supplies only your services
- you own or control at least 50% of the company
- the sole business purpose of the company is to provide your services
Trust or company service providers already registered or supervised elsewhere
You don’t need to register with HMRC under the Money Laundering Regulations if your business is already supervised for money laundering purposes by the Financial Conduct Authority (FCA) or another supervisory body.
The main supervisory bodies
HMRC is the supervisory authority for trust or company service providers unless they’re supervised by their own supervisory body. The main supervisory bodies are:
- Association of Chartered Certified Accountants
- Institute of Chartered Accountants of England and Wales
- Institute of Chartered Accountants of Scotland
- Institute of Chartered Accountants in Ireland
- Association of Accounting Technicians
- Association of International Accountants
- Association of Taxation Technicians
- Chartered Institute of Management Accountants
- Chartered Institute of Taxation
- International Association of Bookkeepers
- Institute of Financial Accountants
- Institute of Certified Bookkeepers
- Law Society
How to register
At the end of each registration period we’ll send you a renewal notice inviting you to renew your registration by paying the annual fee on all your listed premises. If you don’t need your registration to continue then you should notify HMRC.
If you don’t pay the correct renewal fee then HMRC may terminate your registration and remove your business from its anti-money laundering register.