Fifth Money Laundering Directive (The Trust Register)
On 10 January 2020, the Fifth Money Laundering Directive (5MLD) was transposed into UK law. One objective of the 5MLD was to broaden the scope of trusts required to comply with and sign up to the Trust Register Service (TRS), which may apply to some GP surgeries depending on how they are structured.
Property-owning GP partners may be required to register, particularly where the names on the land registry entry do not match the names of the property-owning partners, or where there are more than five surgery-owning partners. Similarly, and depending on the precise wording of your Primary Care Network (PCN) agreement, monies held by one practice on behalf of a PCN could be construed as the formation of a trust and may trigger a registration requirement.
Unless exempt, 5MLD requires the express trusts to register with the TRS. HMRC has published guidance on what may constitute an express trust here and instances where exemptions may apply here .
Please don’t panic, DR Solicitors have produced a really useful blog on this topic and The General Practitioners Defence Fund (GPDF) have also shared with us an interim update below:
You will be aware that on 1 September 2022 there will be a requirement for Trusts to Register with HMRC and that this will likely affect some practices, PCNs, Federations and possibly LMCs.
The GPDF has commissioned an advice note which will be distributed as soon as we are able, but this will not be before the deadline of 1 September.
The website of the Institute of Chartered Accountants in England and Wales contains information from HMRC on failure to Register or late registration which you may find helpful:
In recognition of the fact that the registration requirement is a new and unfamiliar obligation for many trustees, there will be no penalty for a first offence of failure to register or late registration of a trust. The exception is when that failure is shown to be due to deliberate behaviour on the part of the trustees. In that case, or where there are repeated failures, a £5,000 penalty may be charged per offence.
In practice, this means that, should HMRC become aware of a trust which has not been registered by the relevant deadline – either because that trust has been registered late or because HMRC has identified that trust’s existence by other means – HMRC may issue a warning letter to the trustee or agent. It would usually only charge a penalty if that letter were not acted on.
The website contains other relevant information and can be accessed at: https://www.icaew.com/insights/tax-news/2022/aug-2022/hmrc-updates-trs-manual-in-advance-of-1-september-deadline
GPDF is unable to answer individual queries which should be taken up with the appropriate professional advisers.
As soon as we have any further information, we will share it with practices.