Beneficial Ownership of Trusts – What Charities Need to Know

Introduction

The European Union (Anti-money Laundering: Beneficial Ownership of Trusts) Regulation 2021 (the “2021 Regulations”) requires trustees of express trusts to file beneficial ownership information in the new Central Register of Beneficial Ownership of Trusts (the “CRBOT”).

The 2021 Regulations apply to all express trusts established by deed or declaration in writing whose trustees are resident in the State or which is otherwise administered in the State, including trusts established for charitable purposes (a “Relevant Trust”). The 2021 Regulations are inherently broad in scope - there is no minimum threshold of value or duration.

The vast majority of charities in Ireland are incorporated charities and these charities need not file with CRBOT - the directors of those charitable companies are already required to maintain a register of beneficial owners and subsequently file information with the CRO. Please see this link for further information on this.

If you are an unincorporated charity or religious order, we recommend that you review your charities position to determine if a Relevant Trust is contained in your charities governing documentation.

Who is a beneficial owner?

A charity does not have traditional “beneficial owners.” Its assets are held for its particular charitable purpose and the charity is operated for the benefit of its beneficiaries. Accordingly, for charities, the beneficial owners are considered to be (1) the trustees, (2) the committee or other governing body of the charitable trust and (3) any individual who has control over the charitable trust.

Obligation of Trustees of a charitable trust

Trustees must:

• take “all reasonable steps” to obtain adequate, accurate and up to date information of beneficial owners of the Relevant Trust;
• establish and maintain an Internal Register;
• file beneficial ownership information in CRBOT; and
• maintain up to date information in the Internal Register and in CRBOT

Sanctions

Trustees of Relevant Trusts created before 23 April 2021 ought to have filed the requisite information by now, trustees of Relevant Trusts created after 23 April 2021 must file within six months of their establishment.

It is a criminal offence if trustees of a Relevant Trust fail to comply with the 2021 Regulations. Varying penalties may apply depending on the breach. Maximum penalties for non-compliance carry fines not exceeding €500,000 for conviction on indictment and up to 12 months imprisonment for summary conviction or conviction on indictment.

Next Steps

It is important that if you are a trustee of a Relevant Trust, that you collate the requisite beneficial ownership information and file it with CRBOT. If you are unsure if your charity or not for profit is regarded as a Relevant Trust under the 2021 Regulations, you should consider if the trust was established in writing by deed or declaration (where certainty of intention, certainty of subject matter, and certainty of objects is present). Is the trust administered in Ireland? If so, it is likely a Relevant Trust. If you are unsure, do seek legal advice as sanctions for breach of the 2021 Regulations are onerous.

Cian Clinch | Partner | Lead Contact for Charities Institute Ireland