A small but long established firm of chartered accountants in Essex is looking to set up a trust company to act as trustee for various client trusts to avoid individual partners being involved. The latter may cause issues in the event of death,retirement or even holidays if there are urgent papers to sign!
Are there any regulatory requirements for such a trust company? (Eg registration,annual returns). The firm think not but want to check.
Richard Holme
Creaseys
FATCA registration.
Trust corporation status (I donāt believe this creates any regulatory issues once incorporated).
Checking it is covered by the firmās insurance policy
I donāt know whether it has to be notified to the ICAEW as with the SRA.
No FCA or other registration is usually necessary. Just the usual company/tax filings.
I think that is it.
Andrew Goodman
Osborne Clarke LLP
They probably mean a ātrust corporationā rather than just a ātrust companyā. Certain actions require there to be at least two trustees or a ātrust corporationā (eg s39 Trustee Act 1925). If a trustee is a company but not a trust corporation, they could well run into difficulties.
There are special requirements for creating a trust corporation. Practical Law has a useful note about it.
Paul Davidoff
Moon Beever
As you have identified, a corporate trustee has various benefits over the use of individual trustees. In addition to the obvious are those linked to FATCA, CRS and the requirement for legal entity identifiers (LEIs), where the circumstances of the individual trustee can complicate the trustās registration, etc.
Unless the corporate trustee is within the regulated umbrella of the āparentā firm, it will need to register with HMRC as a trust and company services provider under the anti-money laundering regulations.
A corporate trustee within England & Wales can be either a simple trust company, or a trust corporation. Whilst there are minimum capital requirements for the latter, amongst its benefits is the ability to operate as a sole trustee.
Keith Wallace of Reed Smith (current President of TACT ā The Association of Corporate Trustees) wrote a useful article on corporate trustees: http://www.tact.uk.net/wp-content/uploads/2015/02/tcchecklist.pdf
Paul Saunders
There is the matter of the Ā£100,000 paid up Capital.
The money Laundering regs also operate on a slightly different footing.
Adrian Traher
Civil Wills
You can get away with a lot with just a plain vanilla company but if they would like it to take out probate or regularly hold land, a trust corporation would be necessary.
If they want to avoid the capital contribution for a TC then probate can be addressed by a partner at the time of the death taking out the probate as attorney for the company. Land issues can be skirted by appointing a second individual or corporate co-trustee for the relevant trust (often just for the purposes of the sale). A second trustee would also solve problems of taking over existing trusts with two or more trustees.
This may all of course defeat the main object of having a trust company, in which case a TC would be the appropriate route.
Andrew Goodman
Osborne Clarke LLP
The usual stumbling block for a trust corporation, as Adrian says, is the capital adequacy requirement of Ā£100,000, and approval by the Secretary of State via Companies House I believe
Iain Cameron
STAR LEGAL LIMITED