---
title: How do you conduct customer due diligence when dealing with a trust?
description: "Learn how to carry out customer due diligence on a trust: identify trustees and beneficial owners, check the Trust Registration Service, and know when EDD applies."
---
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# How do you conduct customer due diligence when dealing with a trust?
When a trust buys or sells art, your checks need to establish who is acting for it, who benefits from it and who controls it.
This article is based on UK law and guidance: the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the Regulations), HMRC guidance and British Art Market Federation (BAMF) guidance. If you operate outside the UK, the principles may still be useful. Many requirements derive from the same Financial Action Task Force (FATF) standards. However, the detail differs between jurisdictions, including thresholds, beneficial ownership registers and enhanced due diligence triggers. Check the legislation and supervisory guidance that apply to you.
Where customer due diligence (CDD) is required, all trustees must be identified and their identities verified to the applicable standard. However, this does not necessarily mean collecting the same documents from everyone.
Until HMRC publishes its sector guidance for Art Market Participants (AMPs), HMRC says AMPs should follow its Part 1 and Part 3 guidance together with BAMF guidance. Where they differ because of the 2026 changes to the Regulations, follow HMRC’s Part 1.
(HMRC AMLG2100.)
### **Who is your customer?**
Most trusts do not have a separate legal personality. The trustees entering into the transaction in that capacity are therefore your customers and require customer identification and verification.
BAMF guidance allows a qualified, risk-based approach for a large, well-known and accountable trust: you may limit the trustees treated as customers to those giving instructions. The remaining trustees must still be identified and verified as beneficial owners. This is not a general exemption for trustees who are not giving instructions.
(BAMF §§5.138 and 5.149.)
### **Do all trustees need to provide the same identity documents?**
Not necessarily. The requirements depend on each person’s role:
- **Customers:** identify them and verify their identities using reliable, independent documents or information.
- **Beneficial owners:** identify them and take reasonable measures to verify their identities so that you are satisfied you know who they are.
- **Representatives:** identify and verify anyone acting on the customer’s behalf and confirm their authority to act.
Your risk assessment determines the extent of beneficial-owner verification. It does not allow you to leave someone out simply because they appear less involved in the transaction.
Obtaining a list of names does not, by itself, demonstrate identity verification.
(Regulation 28(2), (4) and (10); HMRC AMLG11300 §13.2.)
### **Who are the trust’s beneficial owners?**
Under Regulation 6, they are:
- the **settlor**, who establishes the trust;
- **all trustees**;
- the **beneficiaries**, who benefit from the trust;
- where some or all beneficiaries have not been determined, the relevant **class of beneficiaries**; and
- any individual exercising **control** over the trust.
A protector may also qualify depending on their powers, for example powers to appoint or remove trustees, or to veto the investment or distribution of trust property.
Where beneficiaries have not yet been determined, record the relevant class rather than requesting identity documents for people who have not been identified.
Obtain enough information about the class to identify individual beneficiaries once they are determined, for example when they receive a distribution. In a business relationship, identify them at that point and take reasonable measures to verify their identity as part of keeping your CDD up to date.
(Regulations 6(1)(e), 6(2) and 28(11); BAMF §5.147.)
### **What information must you obtain?**
You must identify:
- the settlor and all trustees;
- the beneficiaries or, where they have not been determined, the relevant class; and
- any other individual exercising control over the trust, which may include a protector.
You must also take reasonable measures to understand the trust’s ownership and control structure.
You should also establish:
- the trust’s full name;
- the trust’s type;
- the trust’s purpose;
- the trust’s country of establishment; and
- the name of any protector, whether or not their powers amount to control.
Trustees are required to tell you they are acting as trustees and to provide information identifying the trust’s beneficial owners. Ask them to do so.
(Regulations 6, 28(4) and 44; BAMF §§5.145–5.146; HMRC AMLG11400 §14.9.)
### **What evidence can support this?**
Supporting evidence may include relevant trust-deed extracts, trustee appointment records, identity documents and reliable independent records.
**Check what each document actually proves.** A document naming someone as a trustee may establish their appointment without adequately verifying their identity.
There is no single document pack suitable for every trust. Assess whether the combined evidence establishes the relevant identities and roles and gives you a sufficient understanding of the ownership and control structure.
BAMF guidance states that register information alone is insufficient to verify a trust’s beneficial owners. Assess what additional evidence is needed for the individuals and risks involved.
(BAMF §5.148.)
### **What if a trustee is a company or overseas entity?**
Establish the entity’s role and apply the identification and verification requirements appropriate to it. A corporate trustee should not automatically be treated like an individual trustee.
Where an entity is a beneficial owner, identify it and take reasonable measures to verify its identity. Identifying the entity tells you who it is, not who owns or controls it, so you must also take reasonable measures to understand its ownership and control structure. This does not automatically require customer-level verification of every shareholder or director.
The absence of equivalent disclosure requirements in another country does not remove your UK obligations. Consider whether reliable alternative evidence can satisfy them. If required CDD remains incomplete, you must not proceed.
(Regulation 28(3A) and (4); BAMF §5.151.)
### **Do PEP and sanctions checks still apply?**
Yes. Assess all individual trustees and other individual beneficial owners to determine whether they are politically exposed persons (PEPs), family members of PEPs or known close associates. This applies whether a trustee is treated as a customer or only as a beneficial owner.
Carry out appropriate sanctions checks on the customer, trustees, other beneficial owners and relevant representatives. For entities, consider ownership and control as well as listed names.
Sanctions obligations apply separately from AML customer due diligence.
(Regulation 35; OFSI: Financial sanctions guidance for High Value Dealers and Art Market Participants.)
### **When are additional checks needed?**
Assess the trust’s purpose, structure, funding, activities and geographical connections. Unexplained complexity, multiple layers or limited transparency may require further information and verification.
Where a high risk of money laundering or terrorist financing is identified, apply enhanced due diligence (EDD) and enhanced ongoing monitoring. EDD is also mandatory, whatever your risk assessment, where:
- a trustee or other beneficial owner is a PEP, or a family member or known close associate of one;
- the transaction or relationship involves a person established in a country subject to a FATF call for action;
- the customer has provided false or stolen identity documents or information; or
- the transaction is complex or unusually large, follows an unusual pattern, or has no apparent economic or legal purpose.
(Regulations 33 and 35; BAMF §§5.152–5.154.)
### **Do you need to check the Trust Registration Service (TRS)?**
Regulation 30A applies when you establish a business relationship with a trust that is required to register on TRS. It does not apply to an occasional transaction, although your risk assessment may still lead you to request the information.
Before establishing the business relationship, you must obtain an up-to-date excerpt showing the beneficial ownership information held on TRS. You cannot access TRS directly. Ask the trustees to download HMRC’s Proof of Registration document from their TRS account and provide it to you. The document includes the beneficial owners recorded on TRS.
If a trust that should be registered cannot provide proof of registration, establish why before proceeding.
Compare the TRS information with your CDD findings. Report any material discrepancy to HMRC. HMRC guidance advises first raising the discrepancy with the trustees, who may correct the register and provide an updated document.
These checks also apply as part of ongoing CDD and monitoring of an existing relationship.
(Regulation 30A; HMRC TRSM70030, TRSM70040, TRSM70050 and TRSM70060.)
### **What if required information is unavailable?**
First establish what is missing and whether reliable alternative evidence can meet the requirement.
If you cannot complete the CDD required by Regulation 28, you must not proceed with the transaction or establish the business relationship. Regulation 31 also requires you to terminate an existing relationship and consider whether a suspicious activity report (SAR) is required.
**Classifying the customer as high risk or obtaining management approval does not replace missing mandatory CDD.**
A refusal to provide information does not automatically require a SAR. Assess the circumstances and record your reporting decision, including your reasons if no report is made.
(Regulation 31; HMRC AMLG11300 §13.5.)
### **What if you have already received funds?**
Do not assume you can immediately return them.
Funds already deposited may be returned to the depositor using the same payment method and originating account. Where suspicion arises, assess the applicable reporting, exemption and consent requirements before returning the funds.
The consent provisions under the Proceeds of Crime Act and the Terrorism Act apply.
(Regulation 31(2); HMRC AMLG11300 §13.5.)
### **What should you keep on file?**
Record each person’s role, the information and evidence obtained, the checks completed and why those checks were sufficient for the assessed risk. Keep these records for five years from the end of the business relationship or the date of the occasional transaction.
(Regulations 28(16) and 40.)
#### **Important**
This article provides general guidance on the Money Laundering Regulations 2017 as they apply to UK Art Market Participants. It is not legal advice and does not replace your own risk assessment, policies, controls and procedures. Take legal advice where the trust’s structure, the persons requiring checks or the sufficiency of the evidence is unclear.
This article reflects the Regulations and guidance as at 29 October 2026. HMRC’s sector guidance for Art Market Participants has not yet been published and may change the position described here.
**Further reading**
- [HMRC AMLG2100: Art Market Participant guidance (interim position on BAMF)](https://www.gov.uk/hmrc-internal-manuals/anti-money-laundering-guidance-for-supervised-businesses/amlg2100)
- [BAMF guidance for UK Art Market Participants, 6 February 2023 edition, §§5.137–5.155](https://www.tbamf.org.uk/_files/ugd/07b84b_3e6bd36ba8194638aeeac583ad630930.pdf)
- [HMRC AMLG11300: Customer due diligence](https://www.gov.uk/hmrc-internal-manuals/anti-money-laundering-guidance-for-supervised-businesses/amlg11300)
- [HMRC AMLG11400: Identifying and verifying your customers](https://www.gov.uk/hmrc-internal-manuals/anti-money-laundering-guidance-for-supervised-businesses/amlg11400)
- [HMRC TRSM70030: Resolving discrepancies with the trustees](https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm70030)
- [HMRC TRSM70040: The Proof of Registration document](https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm70040)
- [HMRC TRSM70050: Reporting a material discrepancy](https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm70050)
- [HMRC: Reporting a trust discrepancy](https://www.gov.uk/guidance/report-a-trust-discrepancy-to-hmrc)
- [HMRC TRSM70060: Discrepancies during ongoing CDD](https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm70060)
- [Regulation 6: Trust beneficial owners](https://www.legislation.gov.uk/uksi/2017/692/regulation/6)
- [Regulation 28: CDD measures](https://www.legislation.gov.uk/uksi/2017/692/regulation/28)
- [Regulation 30A: Register checks and discrepancies](https://www.legislation.gov.uk/uksi/2017/692/regulation/30A)
- [Regulation 31: Where required CDD cannot be completed](https://www.legislation.gov.uk/uksi/2017/692/regulation/31)
- [Regulation 33: Enhanced due diligence](https://www.legislation.gov.uk/uksi/2017/692/regulation/33)
- [Regulation 35: Politically exposed persons](https://www.legislation.gov.uk/uksi/2017/692/regulation/35)
- [Regulation 40: Record-keeping](https://www.legislation.gov.uk/uksi/2017/692/regulation/40)
- [Regulation 44: Trustee obligations](https://www.legislation.gov.uk/uksi/2017/692/regulation/44)
- [OFSI: Financial sanctions guidance for High Value Dealers and Art Market Participants](https://www.gov.uk/government/publications/financial-sanctions-guidance-for-high-value-dealers-and-art-market-participants/financial-sanctions-guidance-for-high-value-dealers-art-market-participants)
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