New money laundering regulations which came into force on 26 June 2017 impose new duties on trustees. The regulations were not drafted with pension schemes in mind, and some key questions about how they apply to pension schemes have not yet been resolved.
The regulations contain new requirements for trusts to keep registers of information about the trust. If the trust is liable to income tax, capital gains tax, inheritance tax, stamp duty land tax, stamp duty reserve tax or Scottish land and buildings transaction tax it must pass the information to HMRC by 31 January 2018. In particular, trusts need to hold details of each beneficiary's National Insurance number or unique taxpayer reference (UTR) with additional record-keeping requirements applying to beneficiaries who have neither of these. There is also a requirement to provide details of trust assets valued as at the date that information is first provided to HMRC.
Many pensions professionals have queried how the requirements apply in a pension scheme context and whether HMRC really does want or need to be provided with such detailed information. Representatives from the pensions industry are seeking clarification from HMRC as to how the regulations are intended to apply to pension schemes. Trustees need to consider whether to take steps now in order to achieve compliance or whether to wait in the hope of receiving further guidance from HMRC regarding its expectations of scheme trustees.
The regulations also include a requirement for a person who acts as a trustee by way of business to be registered with HMRC. This requirement was also contained in previous money laundering regulations. Although neither set of regulations contains an exemption for pension schemes, HMRC appears to be continuing its existing policy, published in its guidance, of not requiring trustees of occupational pension schemes to register on the grounds that HMRC considers them "low risk".