Understanding Trust Beneficial Owner Declarations
New regulations were introduced on 1 April 2023 that impact trusts, their beneficial owners, and accountable institutions. These regulations were outlined in the General Laws (Anti Money Laundering and Combating Terrorism Funding) Amendment Act and are a part of the government’s efforts to enhance transparency, combat money laundering, and prevent tax evasion.
The Ins and Outs of the New Trust Regulations
In the context of trusts, beneficial owners are individuals who either directly or indirectly own or control a significant portion of the trust. This can include settlors, trustees, protectors, and beneficiaries.
The new regulations require trusts and other legal arrangements to maintain accurate and up-to-date information on their beneficial owners. Accountable institutions must now keep detailed records of their clients, including information on beneficial ownership. The aim is to improve transparency and ensure that all parties involved in trusts are correctly identified and accounted for.
The new reporting requirements mandate that trusts disclose comprehensive information about their beneficial owners. Trustees are required to maintain a register that includes the following information:
- Full name
- Date of birth
- Identification number (such as an ID, passport or social security number)
- Residential address
- The nature and extent of the beneficial interest held
Implications of the New Regulations
The new trust regulations have several implications for trusts and accountable institutions:
- Greater Scrutiny: Trusts can expect increased scrutiny from SARS and other regulatory authorities, as they will now have access to detailed information about beneficial owners.
- Increased transparency: The new regulations promote transparency by ensuring that all parties involved in a trust are correctly identified and accounted for.
- Improved compliance: Trustees will need to ensure they comply with the new regulations to avoid penalties and reputational damage.
Trustees must act proactively by collecting the mandated information to maintain the register of beneficial owners. This information must be kept current and, in accordance with this new legislation, submitting the pertinent details to the Master’s Office. With the assistance of professional trust services, trustees can demonstrate their commitment to transparency and compliance.
The dedicated MMS Trust Services team is committed to providing exceptional and professional trust services by expertly handling the submission of trust beneficial ownership declarations on behalf of our valued clients.
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