Money laundering supervision for trust or company service providers
Find out if you’re a trust or company service provider who needs to register for supervision with HMRC under the money laundering regulations.
Who should register
You’ll have to register with HMRC for supervision under the money laundering regulations if your business is a trust or company service provider, unless you’re already supervised by another body.
You must not run your business until HMRC has confirmed that your application has been successful.
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
- administrative address for a company, partnership, other legal person or arrangement
- act or arrange for another person to act as a:
- director or secretary of a company
- partner (or 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
Trust or company service provider services can be provided by anyone including:
- company formation agents
- professional trustees
- large franchise operations providing mail holding and forwarding services, accountants and solicitors
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 does not include the normal process of headhunting or advertising to find a suitable candidate for a position that a recruitment agency would carry out.
Directors
You are a director if you:
- are appointed as a director and your name is on the register at Companies House, whether or not you appear on the register of people with significant control
- act as a shadow director by being a person in accordance with whose directions or instructions the directors of the company are accustomed to act
You’re not covered by the rules if you’re only called a director as part of your job title, unless covered by either of the above points.
Express trusts
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).
If you act as a professional trustee, or arrange for a third party to act as professional trustee, of an express trust, you need to register as a trust or company service provider.
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
- provision of:
- registered offices
- business addresses
- accommodation
- 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, 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
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.
High-risk businesses
A company is a high-risk business if it operates in a:
- jurisdiction that has weak anti-money laundering systems
- high-risk sector
This will include a jurisdiction or high-risk country noted by the Financial Action Task Force or the European Commission as having weak anti-money laundering systems. You can get guidance on high-risk jurisdictions from HM Treasury on GOV.UK.
A business operates in a high-risk sector if:
- it carries out frequent cash transactions of 15,000 euros or more
- it’s a company operating in the UK but incorporated outside the UK in a jurisdiction that is not equivalent to the UK
- some of its share capital is held as unregistered bearer shares
- it involves nominative shareholding
An individual providing their services to a high-risk business does not 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 do not do any of these things, then you are not carrying out the activity by way of business and you do not need to register with HMRC.
If you have questions about ‘by way of business’, contact HMRC for guidance.
Mailbox services
You’re acting as a trust or company service provider and must register if you provide mailbox services to a customer that’s a company, partnership or similar legal person. This includes if you provide:
- company services to businesses by forwarding their mail
- virtual office services for customers that are not physically present at the address for a meaningful period of time
- a registered office address to a customer which meets the requirements of Part 6 of the Companies Act 2006
- business address from which a customer operates a business without having rights to a fixed physical space for a meaningful period of time
- correspondence address through which a customer can be contacted in writing but the:
- customer is not physically present there
- customer’s statutory register, index or other documents are not kept there for inspection
- accommodation address where customers can have mail items delivered to for retrieval by an authorised person
You’re not acting as a trust or company service provider if you provide the services to sole practitioners or private individuals.
Who does not need to register
You do not have to register with HMRC if you’re an individual providing your services:
- on a limited basis, to businesses as a director, company secretary or partner as long as you’re not providing your services to a high-risk business or in a high-risk jurisdiction
- as a director, company secretary or partner to a:
- business that’s already supervised under the money laundering regulations
- public authority
- business authorised by a public authority to act on their behalf where the only customers are also public authorities
- as a company director or company secretary for the company that employs you
You also do not have to register with HMRC if you’re:
- a company providing their services as a company director, company secretary or partner to another company who is a member of the same group
- an individual or company offering professional trustee services to certain low-risk trusts
- a firm or sole practitioner that introduces customers to different firms, or sole practitioners that provide a trust or company service provider service, and has no further contact with an introduced customer
- 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
Low-risk trusts
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 is not a low-risk trust except occupational share schemes and employee share schemes in low-risk trusts, which may contain some discretionary element.
Trust or company service providers already supervised elsewhere
You do not need to be supervised by 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.
If you’re supervised by a professional body supervisor your details will be passed to HMRC who must keep a record of all trust or company service providers.
The professional body supervisor will continue to supervise you under the regulations.
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 the:
- Financial Conduct Authority
- 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
- Institute of Accountants and Bookkeepers
- Institute of Financial Accountants
- Institute of Certified Bookkeepers
- Law Society
Dormant companies
A dormant company that does not charge for their services as a trust or company service provider will not fall within scope of the regulations because they’re not acting ‘by way of business’.
Where a business appoints a dormant company as a corporate trustee (subject to low-risk trust exemptions) or as a corporate director, the appointing business will fall within scope of the regulations because it’s arranging for another company to act.
How to register
Apply to register with HMRC using the online service.
You’ll automatically apply for the fit and proper test as part of the registration process. You’ll be able to pay your fees online at the same time. Check out the fees you’ll pay for money laundering supervision
Annual supervision
At the end of each registration period, we’ll send you a supervision notice inviting you to update your registration by paying the annual fee on all your listed premises.
If you do not need your registration to continue, then you should tell HMRC.
If you do not pay the correct fee, then HMRC may terminate your registration and remove your business from its anti-money laundering register.
Further information
HMRC has published guidance for trust or company service providers on how to comply with their obligations under the money laundering regulations and related legislation.
The guidance explains what businesses must do to protect themselves from the risks of money laundering and terrorist financing and how to report suspicious activity.
More information is available about understanding risks and taking action for trust or company service providers.
You can also watch recorded webinars to find out more about money laundering supervision.
Last updated 16 March 2023 + show all updates
-
The entry in the main supervisory bodies list for ‘International Association of Bookkeepers’ has been replaced with ‘Institute of Accountants and Bookkeepers’.
-
Updated the 'annual supervision' section because 'annual renewal' has been renamed to 'annual supervision' and 'renewing your registration' has been renamed to 'updating your registration'.
-
'Who should register' section updated to reflect changes to the Money Laundering Regulations. From 10 January 2020, trust or company service providers must not trade until HMRC has confirmed the application has been successful.
-
Information added on who does not need to register if trust or company service providers are registered or supervised elsewhere.
-
Updated guidance to provide more information about mailbox services and explain who doesn't need to register.
-
Content reviewed and updated to simply the registration process.
-
First published.