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Charities have three potential filing obligations during October, these are:

  1. Filing of details with the Central Register of Beneficial Ownership of Trusts

  2. Filing of an Annual Report with the Charities Regulator, and

  3. Confirmation of compliance with the Charities Governance Code

1. Central Register of beneficial ownership of trusts (CRBOT) by 23 October 2021

New regulations are in place relating to trusts based in Ireland and the identification of their beneficial owners - the EU (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2021 (Trust Regulations). The Trust Regulations implement an EU directive on anti-money laundering measures and have a very wide scope. The 2021 Trust Regulations apply, with narrow exemptions, to all express trusts which are established by deed or declaration and whose trustees are resident in Ireland or which are administered in Ireland.

MHC Charities ran a short webinar on the topic of the Trust Regulations on 21 October 2021 at 11am, with a particular focus on the charities and not-for-profit sector. If you would like to watch the recording, click here.

In addition of our webinar, the following Q&A will be of assistance:

How to determine if the Trust Regulations apply to your charity or not-for-profit?

This is not a straightforward question to answer, but in general terms:

  • If your charity or not-for-profit is established as a company, there is no obligation to register on the CRBOT, unless the memorandum and articles of association (M&A) of your charity contains an “express trust”. Most M&As will provide for the power to hold something on trust. However, that does not mean that a trust is established by the M&A. There must be an “express trust” for the Trust Regulations to apply.

  • If your charity is established as a “charitable trust”, of which there are 621 registered with the Charities Regulator, according to its 2020 Annual Report, then there is an obligation to comply with the Trust Regulations and to register on the CRBOT.

  • All other charities and not-for-profits like unincorporated associations, religious congregations established pursuant to a canonical constitution, statutory bodies and other legal structures should seek legal advice on their obligations under the Trust Regulations, as (i) if their charity is established by deed or other declaration in writing; and (ii) that written document contains an “express trust”; then there is an obligation to comply with the Trust Regulations and to register on the CRBOT.

  • If your charity, regardless of its legal form, put in place a written document pursuant to which any of the charitable assets are held on trust by third parties, those written arrangements must also be looked at to determine if the written document contains an “express trust”. This would then result in an obligation to comply with the Trust Regulations and to register on the CRBOT.

What if my charity or not-for-profit is a company and has already filed details of beneficial owners with the Companies Registration Office?

If your charity or not-for-profit is established as a company, the directors are already required under the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 to keep a register of beneficial owners. Directors must also file details on the central register maintained by the Registrar of Companies. However, if the company is a trust company, operating under an express trust, it may have additional obligations under the Trust Regulations. Charity trustees should seek legal advice on their obligations in this case.

What are the filing obligations under the Trust Regulations?

Where the Trust Regulations apply, charities and not-for-profits must ensure that they have:

  • An internal register of beneficial owners; and

  • Filed on the central register (CRBOT) maintained on-line by the Revenue Commissioners by 23 October 2021.

What does this mean for my charity?

  • Charity trustees should consider the legal form of their charity or not-for-profit and seek legal advice under the Trust Regulations

  • Where the Trust Regulations apply, the trustees must take reasonable steps to obtain and hold adequate, accurate and current information in respect of the trust’s beneficial owners, and

  • For charitable trusts:

    • the beneficial owners will mean the trustees, any committee or governing body managing the trust and any other person with control

    • Information required includes the name, address, date of birth and nationality as well as PPS number, and

    • The register must also include a statement of the nature and extent of the interest held or the nature and extent of control exercised.

Designated entities like financial institutions, investment managers and professional advisors are required to make enquiries about the beneficial ownership of clients. Charities may find this enquiry is raised, for example, on opening new bank accounts or dealing with investment property. In this case, it is important that the trustees follow the Trust Regulations and note that there are criminal sanctions on trustees for failure to comply with the Trust Regulations.

2. Annual Report filing with the Charities Regulator

Any charity that has a financial year end of 31 December should ensure that its next annual report is submitted to the Charities Regulator, online, before 31 October.

The annual report should include information about the charity’s activities, beneficiaries, and finances for the previous financial year.

3. Charities Governance Code

When filing their 2021 Annual Report with the Charities Regulator, charities will also be required to confirm, for the first time, the extent of their compliance with the Charities Governance Code. They must also confirm whether they are complex or non-complex charities. Charities should tick the relevant declaration having completed the Compliance Record Form with the charity trustees. They should also ensure that they hold evidence of compliance with each of the standards, although that evidence does not have to be submitted online as part of the annual report.

If a charity is not in full compliance with the Charities Governance Code, further detail can be provided to the Charities Regulator within the annual report.

For more information and expert guidance on the above issues, contact a member of our Charity and Not-for-Profit team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

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