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EU law to forcesmillions of expats to declare confidential financial information
| Published: | 18 Feb at 6 PM |
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A controversial bill being proposed by EU lawmakers will make declaring confidential financial information held by trusts compulsory.
The aim of the proposed legislation is to stop corporate money-laundering, but will catch expats and EU member state residents in its net. To the EU, trusts have much less wide implications than is usually understood in the UK, with even the joint ownership of a home as in Land Registry documents coming under the proposed new law.
Families will be forced to hand over accounts for the so-called trusts, including bank account details, investments, details of bequests in wills and property holdings. As trusts are not widely used in the rest of the EU member states, UK citizens and expats will be the worst affected.
Lawyers are arguing that the European concept of the trust implies avoidance of tax but that, in the UK, trustees are already forced to report income and gains to HM Revenue and Customs. Trusts are widely used in Britain to keep family finances private during estate planning as wills are published in the public domain.
Britons with life insurance, those who’ve made wills and couples jointly owning their home are likely to be involved in several trusts without realising. Over 25 per cent of conventional British trusts are set up to protect the elderly or vulnerable children under 18, not as tax avoidance vehicles.
Prime Minister David Cameron has waded into the fray, saying that he is concerned about the costs of the preparation of trust accounts as well as the removal of privacy and financial confidentiality for UK citizens should the bill be passed. British MP Mark Field states that transparency may well be in the public interest, but placing private family financial issues under scrutiny is not.
The aim of the proposed legislation is to stop corporate money-laundering, but will catch expats and EU member state residents in its net. To the EU, trusts have much less wide implications than is usually understood in the UK, with even the joint ownership of a home as in Land Registry documents coming under the proposed new law.
Families will be forced to hand over accounts for the so-called trusts, including bank account details, investments, details of bequests in wills and property holdings. As trusts are not widely used in the rest of the EU member states, UK citizens and expats will be the worst affected.
Lawyers are arguing that the European concept of the trust implies avoidance of tax but that, in the UK, trustees are already forced to report income and gains to HM Revenue and Customs. Trusts are widely used in Britain to keep family finances private during estate planning as wills are published in the public domain.
Britons with life insurance, those who’ve made wills and couples jointly owning their home are likely to be involved in several trusts without realising. Over 25 per cent of conventional British trusts are set up to protect the elderly or vulnerable children under 18, not as tax avoidance vehicles.
Prime Minister David Cameron has waded into the fray, saying that he is concerned about the costs of the preparation of trust accounts as well as the removal of privacy and financial confidentiality for UK citizens should the bill be passed. British MP Mark Field states that transparency may well be in the public interest, but placing private family financial issues under scrutiny is not.
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