The Telegraph quotes Dominic Lawrance on Labour’s proposed expansion of rules governing trusts
Labour has pledged to widen registration requirements for UK trusts to stop them being used for illegal activity and boost transparency around trust ownership of property.
Many within the industry are flagging that these proposals could deter legitimate wealth creators, increase red tape, and harm the UK's attractiveness to investors.
Dominic Lawrance, Partner at Charles Russell Speechlys says:
The days in which ultra high-net worth clients baulked at any kind of disclosure pursuant to transparency laws are long gone. Wealthy individuals accept that transparency rules are part and parcel of the modern world. However, they often do have legitimate concerns about public registers of beneficial ownership, particularly where such registers include the value of assets held and/or information that could be plundered for use in identity theft. Such registers engender worries about fraud, kidnap or perhaps just adverse and unjustified publicity, and arguably infringe the right to a private life, which is enshrined in the UK by the Human Rights Act.
There is already very detailed and pretty comprehensive legislation in place in the UK regarding trusts and overseas entities that are registered owners of UK land. The register for overseas entities that own UK land is to a large extent public, and therefore creates concerns about fraud, kidnap and invasion of privacy. The register for trusts is essentially private (i.e. can generally only be accessed by HMRC and law enforcement agencies), and therefore takes a much more sensible, legally justifiable approach.
The legislation in this area is over-complex and has developed in a haphazard way, with the result that there can be an overlap between what is required to be registered under these separate regimes. Some of the drafting of the existing rules is poor. There is a great deal of merit in the proposition that all of the disclosure rules should be brought into a single statute and rationalised, and that all beneficial ownership registers should be private so that the right to a private life is not infringed. However, it is unclear whether this forms part of the package of reform which Labour are proposing.
Read the full piece in The Telegraph here.
