What would HMRC do? Blog 2

6th February 2018

There is still widespread confusion amongst estate agents when it comes to compliance with the Money Laundering Regulations according to Landmark’s Estate Agency Services Division.

Recent research undertaken in the form of a short survey has shown that agent’s still struggle with applying practical solutions to remain compliant.

In a series of short blogs, Landmark’s Ben Robinson talks through the results of the survey. In our second blog we discuss what to do when it comes to applying Customer Due Diligence (CDD) on limited companies.

With over half of respondents answering incorrectly, this question proved to be the most challenging in the survey.

What do you need to do if it is a LTD company selling the property?

a) Identify and check all directors of the business  44%

b) Identify and check the person who is signing the contract  7%

c) Identify and check all beneficial owners of the business  49%

 

HMRC’s guidance identifies as a minimum requirement that agents:

• complete customer due diligence on all customers and beneficial owners before entering into a business relationship or occasional transaction
• identify and verify a person acting on behalf of a customer and verify that they have authority to act for example, someone acting on behalf of a limited company or trust. (4.1)

And later in the guidance the definition of a beneficial owner is outlined:

For a corporate body that is not a company whose securities are listed on the regulated market, a beneficial owner is any individual who:

owns or controls over 25% of the shares or voting rights

ultimately owns or controls whether directly or indirectly including bearer shares holdings or other means, more than 25% share or voting rights in the business

exercises ultimate control over the management

controls the corporate body.

As well as companies incorporated under the Companies Acts, limited liability partnerships industrial & provident societies and some charities (often companies limited by guarantee or incorporated by an Act of Parliament or Royal Charter) are corporate bodies.(4.26)

So when dealing with a limited company, checks must be done on all those who own 25% or more of the shares.

 

Link to HMRC Guidance: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/628696/Estate_Agency_Businesses_Guidance_.pdf 

 

MISSED OUR FIRST BLOG? CLICK HERE TO CATCH UP

 

Landmark’s Compliance in a Box service provides access to Company Checks to provide ownership details of companies. Electronic checks can then be applied to beneficial owners and CDD/EDD undertaken.

Find out more about how you can use electronic checks to demonstrate Customer and Enhanced Due Diligence with pay-as-you-go checks from Landmark. No contracts, tie-ins, set up or data fees. Contact Samantha Peacock on 01524 220013/ sam.peacock@landmark.co.uk or sign up below

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