Publicly available ultimate beneficial ownership registers appear to have been restricted to 'taxable' trusts in the EU's Fourth Money Laundering Directive.

The EU's Fourth Money Laundering Directive ("the Directive") is now available together with its accompanying regulations.

Trilogue negotiations involving the European Parliament, the Council and the European Commission in the last quarter of 2014 determined the final shape of the Directive.

One of the key outstanding discussions from those negotiations, concerned the requirement for member states to maintain publicly available ultimate beneficial ownership registers, for both corporate entities and trusts.

The proposed requirement for all trusts to be registered was the most contentious proposal as far as legal bodies, practitioners and settlors were concerned. In common law jurisdictions, trusts are often used for structuring family wealth and to succession plan and therefore a public central register would have unfortunate and possibly serious consequences for their privacy.

It was therefore pleasing that the mandatory register of trusts only applies to 'taxable' trusts and will not be made public.

There was less good news for companies and foundations, however, where the register will be publicly available to those who possess a 'legitimate interest.'

The definitions of both 'taxable' and 'legitimate interest' are still to be determined and have been kept deliberately wide whilst the Directive goes through the translation phase amongst the member states. It is thought that 'taxable' trusts, in the UK, will mean those trusts that file returns with HMRC. Those with a 'legitimate interest' will almost certainly be NGOs and financial institutions with anti-money laundering filing requirements, but beyond that it is unclear. It is likely that the definitions will first need to be tested before clarity is achieved.

Click here to see what the Chief Minister's Department has recently released, summarising the Jersey Government's understanding of the Directive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.