RSS feedsNew money-laundering rules have botched important trust definitions so badly that professional advisers would be hard pressed to understand them, the Society for Trusts and Estate Practitioners has reiterated.
In a letter to Accountancy Age, David Harvey, the chief executive of STEP, said the ‘beneficial ownership’ rules bore no relation to reality.
‘STEP has been working to find a solution to the problem of defining ‘beneficial ownership’ in the regulations as it relates to trusts, but where it presently has no real meaning. STEP has taken opinion from two QCs which say that it is impossible for even a professional adviser to decide who a beneficial owner is.’
Keith Johnston of STEP added: ‘The regulations ask advisers to verify the 25% owner of a discretionary trust. There’s no such thing.’
Advisers will have to define that ‘owner’ to be sure if they need to make money laundering reports.
Harvey wrote: ‘[Advisers] will not know who to conduct due diligence on, for the millions of trusts they work with, potentially exposing them before law enforcement agencies.’
Johnston said the body is working with the Treasury to iron out the difficulty.
