TRSM70060 - Discrepancy reporting: contents: Timing of discrepancy reporting

Before establishing a Business Relationship and when carrying out ongoing monitoring with a registrable trust (see TRSM24010), Relevant Persons should compare any trust documentation they hold against an excerpt of the register.

Relevant Persons are advised to seek to resolve any material discrepancies with the trustee and request the trustee amend the Trust Registration Service (TRS) if appropriate and provide an amended excerpt of the register (see TRSM70010).

If Relevant Persons believe that the material discrepancies remain unamended on TRS or that the trust remains unregistered then they are required to report these discrepancies to HMRC, as soon as reasonably practical. There is no set timeframe, in recognition of the fact that Relevant Persons may wish to liaise with trustees directly before judging whether a discrepancy report is required.

A Relevant Person may resolve the issue of a trust not being registered by either acting for the trustee in registering the trust, or assisting the trustee in the registration process. There is no requirement for the Relevant Person to report, or cease engagement with, any trust that they are in the process of registering.

HMRC recommends allowing a short period of time, not exceeding 30 days from the date at which the proof of registration was requested, for Relevant Persons to acquire the excerpt of the register from the trustee before they consider whether they should cease their engagement with the trust and make a discrepancy report to HMRC.

Whilst the reporting of a material discrepancy to HMRC does not in itself prevent Relevant Persons from continuing with the Business Relationship, Relevant Persons should consider the nature of the discrepancy and the relative risks arising from it, according to their usual customer due diligence obligations under Regulation 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) (the MLRs), in determining whether the Business Relationship should continue. Relevant Persons should give due regard to Regulation 31 of the MLRs and the ‘duty to cease’ a Business Relationship or transaction where due diligence cannot be properly carried out.

Where a trust is unregistered due to the death of / absence of any trustees, we would expect that the appointment of the trustees would be carried out as quickly as possible and the trust subsequently registered by the (lead) trustee. The Relevant Person would not have to report a material discrepancy in this case if their Business Relationship was restricted to the administration of the appointment of the new trustee and the subsequent registration of the trust.