Money laundering and paid pension scheme trustees: deadline of 1 April changed

The money laundering regime requires certain service providers, including some paid pension scheme trustees, to have in place systems to prevent money laundering as well as to report any suspicious transactions to the Serious Organised Crime Agency. Civil and criminal sanctions may be imposed for compliance failures.

Money laundering is the process by which criminally obtained money or other assets (criminal property) are exchanged for "clean" money or other assets with no obvious link to their criminal origins. Criminal property may take any form, including money. It also includes money, however come by, which is used to fund terrorism.

New regulations provide that a "firm or sole practitioner who by way of business" acts as a pension scheme trustee must comply with the new requirements and must register with HM Revenue and Customs (HMRC). Not all paid pension scheme trustees are professional trustees. While there certainly are businesses/individuals which charge for their services as professional trustees, there are others who are trustees of one scheme and in receipt of only a modest fee. Therefore, whether or not a trustee needs to register is going to depend on the facts of each case.

HMRC originally set the deadline of 1 April for appropriate trustees to register. However, HMRC has been unable to answer queries from individuals as to whether or not they must comply with the new requirements by that date. HMRC has now confirmed that trustees have until 31 May 2008 to register and that the relevant guidance will be updated during April. We consider that trustees who are unsure whether or not they are caught by the registration requirements should wait until this guidance is published before taking any further action.

If you have any further queries please contact your usual Wragge & Co expert.

For more details on paid pension scheme trustees and money laundering see Wragge & Co's analysis dated February 2008.