With recent news stories about personal data loss and data mining implicating big names such as Facebook, the NHS and Uber, privacy is an increasingly scarce commodity.
There are many reasons why privacy may be a concern for a family, including genuine security risks, family tensions or managing family succession. Traditionally, structures such as companies and trusts would be used to attain a level of privacy in relation to asset ownership and other family affairs. However, recently there has been a significant move towards greater transparency.
Property ownership may be one area of particular privacy concerns for a family. High-profile families may face real risks if their addresses are available to the wider public. Families may wish discretion in their management of assets to protect younger members, until sufficiently mature, from full knowledge of the value of their interests.
The Scottish national land registers (the Land Register and General Register of Sasines) have always been public registers naming the owners of land. With the move to digitise records, this information is becoming more accessible. In the past, to protect privacy, a family may have put in place a trust or corporate structure to own the land, with the Trust’s or company’s name appearing on the Land Register.
Register of People with Significant Control
Where a company is chosen, this may no longer be a reliable means to maintain privacy. The new public Register of People with Significant Control (PSC register) requires the disclosure of the beneficial owners of UK companies. In combination with the existing Land Registers, it is now possible to determine the beneficial owners of land, even when a company has been put in place to hold that land. Additionally, the Government intends to create a similar public register disclosing the beneficial owners of overseas companies which hold UK property.
This new register will not only be for overseas companies but also other legal entities. However, the Government have recently stated that trusts will not be required to disclose the identities of their beneficiaries.
“Unlike companies, trusts are typically used by private individuals for managing family owned assets including for minors and vulnerable family members… Publishing these persons’ details would not be proportionate and effective especially as disclosure would undermine family confidentiality.” (A Register of Beneficial Owners of Overseas Companies and Other Legal Entities: The Government Response to the Call for Evidence)
Disclosure of beneficiaries
It should be noted that there is a requirement to disclose the beneficiaries of trusts to HMRC via the Trust Registration Service. This information, however, is not available to the wider public.
It would appear the Government have recognised that trusts in particular are commonly used by families for reasons requiring privacy for the beneficiaries. In a climate where personal data is increasingly available to the wider public, privacy is a key benefit that a family trust can provide.