A common area of confusion (as well as many others!) relates to Trusts of a company and what information needs to be disclosed in relation to PSCs. In this article we aim to try and clear up this area of confusion.
The intricacies as to how the PSC requirements apply to trusts where the trust holds a shareholding of more than 25% in a UK company can be tricky to say the least.
As most of us will be aware, where a qualifying shareholding in a UK company (in percentage terms) is owned or controlled by a legal entity, that entity’s details must be put on the PSC register. An entity will only be registrable if it is a relevant legal entity (an RLE). A legal entity is an RLE only where:
- It keeps its own PSC register (ie it is a UK company or a UK LLP)
- It is subject to Chapter 5 of the Financial Conduct Authority’s Disclosure and Transparency Rules
- It has voting shares admitted to trading on a regulated market in the UK or EEA or on specified markets in Switzerland, the USA, Japan and Israel.
So looking at the rules above the majority, if not all, non-UK resident trust companies will therefore not qualify as RLEs and, as such, are not registrable. In these circumstances, even though the trust company satisfies the 25% and over test in terms of shareholding and voting rights, details of the trust company should not be entered on the PSC register. Instead, details of any individuals who have a majority stake in the trust company will need to be disclosed.
Additionally, if another legal entity is a shareholder in the trust company and is not an RLE, the ownership and control of that entity will need to be reviewed, with the relevant details disclosed, and the chain upwards continues using these rules.
Our web based Secretarial system automatically calculates the PSC details based on the shareholding of the company. If you would like more information, or book a free demo please contact us and we will be happy to help.
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This post was written by Adrian Smart