IEIM112040 | Exchange of Information: Outward requests: Legal and beneficial ownership 

Legal ownership

This includes legal ownership of a company, foundation, partnership, trust, collective investment fund, or a person holding one or more assets in such an entity in a fiduciary capacity or through a similar arrangement. Where there are reporting requirements or a register, the legal owner will normally be the person listed as the owner. The legal owner may be a natural or legal person (e.g. an individual or a company).

Beneficial ownership

Beneficial owners are those natural persons who are the ultimate beneficiary of assets; they may or may not be the direct legal owners. Beneficial owners by definition are natural persons (i.e. individuals).

A key aspect of exchange of information is reducing secrecy arising from a deliberate disconnect between the listed legal owner and the actual beneficial owner. All jurisdictions operating to OECD standards are expected to be able to identify the beneficial owners of shares, trusts, and other assets. This includes identifying owners of bearer shares where they exist.

Example

Customer A was under enquiry in the UK for having insufficient means to support his lifestyle. He claimed a property he used in Jurisdiction B was lent to him by a friend. An exchange of information request revealed that the property was purchased by a company of which Customer A was the beneficial owner. In this example, the company is the legal owner of the property, and Customer A is the beneficial owner.