In a pensions context, are death benefit trusts for the benefit of minors exempted from TRS registration under Schedule 3A to the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020?

For an understanding of what was intended by the government in relation to the proposed exemptions, as set out in its response to the consultation (‘Fifth Money laundering Directive and Trust Registration Services’, published on 15 July 2020), it is necessary to introduce some technical terminology.

By way of background, it is true that 13 respondents advocated an exemption for ‘where a trust is established to hold a Lump sum death benefit for minors’ (see consultation response, paragraph 2.4). It was argued by these respondents that such trusts were ‘regulated elsewhere’, although it is not clear where and how the respondents thought this regulation occurred, given that the assets would by definition no longer be in the wrapper of a registered pension scheme. Death benefit trusts for minors would appear to be outside the scope of the oversight of the Pensions Regulator: see section 5 of the Pensions Act 2004.

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