The UK Trust Registration Service created by the EU's 4th Money Laundering Directive has recently undergone significant expansion under the EU's 5th Money Laundering Directive.
The UK's 2017 Money Laundering, Terrorism Financing and Fund Transfer Regulations now require many trusts that do not have a UK tax liability to register with the UK Trust Registration Service.
The UK Trust Registration Service adopted in the UK has a dual purpose, acquiring taxable trusts domestically, acting as an initial deposit gateway, and fulfilling UK obligations under the Directive.
HMRC has now published limited parts of the first iteration of its UK Trust Registration Service manual, where there is, however, a noteworthy development in relation to the exemption for trusts holding pensions or life policies.
Under a new settlement scheme, a life insurance or pension policy trust that pays only in the event of death, terminal or serious illness or permanent disability of the insured, or to meet the cost of health care provided to the 'insured, will be an' excluded trust 'for settlement purposes, and will therefore be exempt from registration under the UK Trust Registration Service.
Similarly, another new table of the legislation provides that if a trust holds only benefits received in the event of the death of the policyholder with a policy falling within this definition, and less than two years have elapsed since the death of that person, that trust will also be an excluded trust.