By John Greenwood 16 July 2020.
Group risk professionals are celebrating the confirmation that group life assurance is exempt from having to register with the Trust Registration Service, saving an extra admin burden for over 50,000 group life and critical illness trusts.
Yesterday the Government published a summary of responses and the consultation outcome of the Technical consultation: Fifth Money Laundering and Trust Registration Service which confirmed that it has accepted the call from the industry that the scope of the exemption from the requirement to register a trust under the Transposition of the 5th Anti Money Laundering Directive regulations has been clarified as including trusts holding group risk protection policies.
Combined plans, where life and IP or life and group critical illness cover and IP will only get the exemption for permanent disability, meaning these products would have to register.
S2.12 of the consultation says: “The government has taken respondents’ views into consideration when determining which trusts will be exempt from registration. Further details of the parameters of these exemptions can be found in the legislation and will be covered in the forthcoming guidance. In general, the following types of trusts will be exempt from registration on TRS: Trusts imposed by statute, where these do not result from the clear intention of the settlor. For example, the statutory trust arising on intestacy.”
Grid spokesperson Katharine Moxham says: “Grid is delighted with the outcome of the technical consultation which has clarified that trusts holding pure protection policies, including group policies will be exempt from having to register with the Trust Registration Service as required by the Fifth Money Laundering Directive. This has saved over 50,000 group life and critical illness trusts from an extra administrative burden, removing a potential barrier to employers providing group risk benefits for their workers.”
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