ECSH33312 | When customer due diligence is required: occasional transactions

An occasional transaction is defined within regulation 3 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) as any transaction which is not carried out as part of a business relationship.

There are varying thresholds for occasional transactions across the sectors, set out in regulation 27, and you must ensure that the business is aware of and is applying the thresholds appropriate to their business activities.

Money transmitters - regulation 27(1)(b) applies

If you are conducting a check to a money service business (MSB) providing money transmission you must check that customer due diligence (CDD) measures are applied to all transfer of funds exceeding £800. The reference to £800 was inserted into the MLR 2017 from 30 June 2026 - before this the amount was 1,000 euros or more.

However, as shown in the MSB guidance, HMRC expects that money transmission businesses should obtain and verify the identity of customers for all transfers of funds, regardless of value. Usually, a business relationship is established with all customers, and therefore the threshold will not apply.

High value dealers (HVD) - regulation 27(3) applies

HVDs must apply CDD measures for an occasional transaction in cash that amounts to £10,000 or more, whether the transaction is executed in a single operation or in several operations which appear to be linked. The reference to £10,000 was inserted into the MLR 2017 from 30 June 2026 - before this the amount was 10,000 euros or more.

You should ask for a list of HVD cash payments, made and received, for the relevant period you want to test. If the business is unable to provide a list of “relevant” cash transactions, you will need to confirm what business records are available and extract the relevant transactions. You may need to look at a range of records, for example, invoices raised/received, computerised accounts and compare them to bank statements. You should be able to follow the audit trail for a customer transaction from order, payment, to delivery of the goods. See HVD specific guidance for more help.

Letting agency business (LAB) – regulation 27(7A) applies

A LAB must apply CDD measures in relation to any transaction which consists of the conclusion of an agreement for the letting of land:

• For a term of a month or more, and

• At a rent which during at least part of the term is, or is equivalent to, a monthly rent of £10,000 or more. The reference to £10,000 was inserted into the MLR 2017 from 30 June 2026 - before this the amount was 10,000 euros or more.

The LAB must apply CDD measures to both the person who is letting the land and the person who is renting it.

To test whether the LAB is carrying out CDD measures correctly, you should ask the business to provide a full list of rental agreements for the relevant period you want to test, and remove any transactions below the legal threshold.

Art market participants (AMP) – regulation 27(7C) applies

AMPs must apply CDD measures in relation to any trade in a work of art, when it carries out, or acts as an intermediary in, any transaction, or series of linked transactions whose value amounts to £10,000 or more. The reference to £10,000 was inserted into the MLR 2017 from 30 June 2026 - before this the amount was 10,000 euros or more.

AMPs must also apply CDD measures in relation to the storage of a work of art when it is the operator of a freeport and the value of the works of art so stored for a person, or series of linked persons, meets the legal threshold.

For more guidance on when a transaction would be out of scope, see ECSH33315.

All other sectors

All other sectors (including MSBs who do not carry out a transfer of funds (for example currency exchange offices) must apply CDD measures when a customer carries out an occasional transaction that amounts to £12,000 or more, whether the transaction is executed in a single operation or in several operations which appear to be linked. The reference to £12,000 was inserted into the MLR 2017 from 30 June 2026 - before this the amount was 15,000 euros or more.

To check if the business is required to apply CDD measures ask for a full list of transactions for the period you want to test, you will then need to filter out those below the threshold.

See further guidance regarding linked transactions.