Disclosure of Information on Beneficial Ownership – Trusts and Trustees

On the 1st January 2018, new regulations came into force concerning the operation of a Central Register of UBOs for trusts and trustees and for companies, for associations and for foundations.

 

Regarding trusts and trustees, the rules only apply to express trusts generating tax consequences.  Within 14 days from being appointed as a trustee of an express trust, authorused trustees must submit a declaration of ownership to MFSA where such trust has tax consequences.  The regulations list the information to be provided by the trustee regarding every beneficial owner, and this without prejudice to any CDD carried out under the AML regulations; CDD must be carried out before any such information is passed on to MFSA.  Where the beneficiaries of a trust are a class of beneficiaries, special rules apply concerning the description of the class as well as inclusion of family members.  Limited information is to be provided where the trust is set up for charitable persons without any beneficiaries or classes of beneficiaries in whose name the trust is set up (drafting is a little unhappy here).  MFSA will be keeping a register for this purpose, and information must be such as to allow MFSA to fulfil its duties under the regulations.  Changes in beneficial ownership must be notified to the MFSA within 14 days.  If the change is made to the trustee, the latter is required to inform MFSA.  An declaration stating that there has been no change is to be submitted yearly after the first declaration made, to be signed by the trustee.  MFSA should make such information available to listed competent authorities for tax and AML.  In exceptional cases where disclosure of such information would expose the UBO to risk of kidnap, violence, blackmail, fraud or intimidation, such information must not be disclosed.  Subject persons may not rely solely on the register to fulfil their CDD.  Trustees cannot solely rely on their compliance with these regulations and must comply with requests for information from any subject person carrying out CDD.  Data protection rules still apply to information processed in terms of these rules.

 

For trusts having tax consequences where a trustee was appointed before 1st January 2018,  trustees have six months within which to provide information to the MFSA.

 

Administrative penalties of up to EUR 150k are applicable.

 

The MFSA’s Central Register shall be connected to a centralised European Register.

 

The regulations provide for electronic submission of such information.

By Geraldine Spiteri

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Posted in: Corporate Servicesdue diligenceLegal DevelopmentsNews

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