January 23, 2025 Trust information available for inspection under new ROE Rules
The UK Government has published the Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025 (the “Regulations”). The Regulations are not yet law, but if they come into force without further amendment, previously unavailable information about overseas trusts holding UK property will be available upon application from August 2025.
Background
The register of overseas entities went live in August 2022 to increase transparency and fight economic crime. At the time it received criticism for loopholes, including the lack of transparency regarding Trusts. The direction of travel since then has been to further increase transparency and this amendment regarding trust disclosures has been trailed for some time. We previously wrote to clients about this in January when plans were at the consultation stage.
Current Disclosures
As it stands, upon registering with the ROE an overseas entity must provide details of its beneficial owners, which is publicly available via the Companies House website. Entities are also required to provide details of Trusts, broadly that own the overseas entity; however, this information is not made public.
Trusts that fall within the Trust Registration Service (TRS) are still required to register with HMRC. This regime is separate from the ROE and the register can be accessed provided the applicant can show a “legitimate interest” such as investigating money laundering. As discussed below, the concept of “legitimate interest” is employed under the Regulations but in a narrower set of circumstances meaning that trust information submitted to the ROE will be effectively more accessible than that maintained on the TRS. Given that one objective of trust structuring is often confidentiality this could cause significant concern.
A New Disclosure Regime
Under the Regulations, trust information such as details of beneficiaries, settlors, grantors and “interested persons” would be made available upon request:
– The information would be available to anyone; however, they would need to apply.
– In certain circumstances, an individual would need to show a “legitimate interest” as under the TRS regime, but this is restricted to instances where the information requested relates to:
- Minors
- More than one entity
- Those who have lost capacity
– The “legitimate interest” requirement does not extend to information relating to vulnerable persons, the data sharing around such persons having been considered in a consultation by the previous government (see further below).
– Companies House can refuse on national security grounds. There are also exclusions in place where the trust is a pension scheme.
Protection of Information
The Regulations extend the protection of information regime to cover trusts and so an individual will be able to apply to have their details protected if there are grounds to argue that disclosure would give rise to a risk of violence or intimidation.
What next
The Regulations are currently in draft and there is no further guidance on implementation. In our opinion, given the direction of travel is towards greater transparency, the Regulations will likely become law. If passed, applications to access trust data will be available from 31 August 2025.
Beneficiaries eligible for protection would be eligible to apply from 28 February 2025. Elemental can help file these applications where there are lawful grounds. The vast majority, who would not qualify for protection, may wish to consider communications with any other stakeholders affected and those concerned about the changes may wish to seek further guidance from their legal advisors. If you would like to discuss your options, please get in touch.
