AML Regulations 2026: Key Shifts in EDD, Pooled Accounts & TRS for UK Firms

Understanding the Money Laundering and Terrorist Financing (Amendment) Regulations 2026

The landscape of anti-money laundering (AML) compliance in the UK is continually evolving, and AML Regulations 2026 mark a significant, targeted evolution rather than a complete overhaul. On 9 June 2026, The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 were officially made and laid before Parliament, with most provisions expected to come into force in late June or early July 2026.

These amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs 2017) are designed to enhance the effectiveness and proportionality of the UK's AML/CTF regime, ensuring continued alignment with Financial Action Task Force (FATF) standards. For UK accounting practices, understanding these granular changes is crucial for adapting internal policies, procedures, and risk assessments to maintain robust compliance.

This deep dive will explore three critical areas of reform: Enhanced Due Diligence (EDD) for 'unusually complex' transactions, new provisions for pooled client accounts, and expanded Trust Registration Service (TRS) requirements, including for non-UK trusts with UK property. We'll also touch upon other notable changes, such as the conversion of Euro thresholds to Sterling and the inclusion of 'off-the-shelf' firms within regulated activities.

Refined Enhanced Due Diligence (EDD) for 'Unusually Complex' Transactions

One of the most impactful changes for accounting firms relates to Enhanced Due Diligence (EDD). The new regulations refine the triggers for mandatory EDD, shifting the focus from all 'complex' transactions to those deemed 'unusually complex or unusually large in each case given the nature of the transaction'.

This amendment aims to address concerns about 'overly risk-averse behaviour' in sectors where many routine transactions might be considered complex, such as conveyancing. The intention is to ensure EDD measures are applied proportionately, targeting genuinely anomalous or higher-risk activities, rather than imposing unnecessary burdens on lower-risk, albeit intricate, dealings.

Defining 'Unusually Complex' in Practice

For accounting practices, the distinction between 'complex' and 'unusually complex' will require careful judgement and clear internal guidance. While a multi-layered corporate structure might be complex, it may not be 'unusual' if it aligns with the client's legitimate business operations and industry norms. Conversely, a transaction that deviates significantly from a client's typical activity, involves opaque funding sources, or lacks an apparent economic or legal purpose, could trigger the 'unusually complex' threshold.

Action Item: Review and update your firm's internal AML policies and procedures to clearly define what constitutes an 'unusually complex' or 'unusually large' transaction within the context of your client base and services.
Action Item: Provide targeted training to staff on these refined EDD triggers, using practical examples relevant to your practice.

Geographical Risk and EDD

The application of EDD for high-risk third countries has also been narrowed. Mandatory EDD will now apply only to transactions or customer relationships involving jurisdictions on the FATF 'Call for Action' list (often referred to as the 'blacklist'). This is a significant divergence from previous requirements that often included countries on the FATF 'Increased Monitoring List' (the 'greylist').

However, it is crucial to note that countries on the FATF 'Increased Monitoring List' still represent a geographical risk factor that firms must consider in their overall risk assessments under Regulation 33(6)(c) of the MLRs 2017. Practices must continue to exercise their own risk-based judgement and apply appropriate controls where exposure to such jurisdictions is identified.

Navigating New Provisions for Pooled Client Accounts

Pooled client accounts (PCAs) have historically presented unique challenges for AML compliance, and the AML Regulations 2026 introduce specific new provisions to address these. Significantly, PCAs are now decoupled from the Simplified Due Diligence (SDD) framework.

This means that firms can no longer assume a lower risk profile for PCAs simply because they are pooled. Instead, both banks offering PCAs and the accounting firms holding them face new, more stringent obligations.

Updated Requirements for Identification and Verification

Banks are now required to take 'reasonable measures' to understand the purpose of the PCA, gather sufficient information about the customer's business (i.e., the accounting firm), and assess the money laundering risk associated with the account.

Crucially, if a bank requests identity information about the underlying clients whose funds are held in the PCA, the accounting firm is now explicitly obliged to provide it. This is subject to legal professional privilege protections where applicable. This change aims to enhance transparency without requiring banks to conduct full Customer Due Diligence (CDD) on every individual underlying client.

Action Item: Review your firm's procedures for managing pooled client accounts. Ensure you have robust systems to identify and verify all underlying clients whose funds are held in these accounts.
Action Item: Update engagement letters and client terms to reflect the possibility of sharing client identity information with your bank for AML compliance purposes, while clearly outlining legal privilege safeguards.
Action Item: Ensure your firm maintains written records of all funds paid in and out of pooled client accounts for a minimum of five years, as this is now an explicit AML obligation.

Expanded Trust Registration Service (TRS) Obligations

The Trust Registration Service (TRS) has been a significant area of focus for AML transparency, and the AML Regulations 2026 bring further expansions, particularly for non-UK trusts. The objective is to close identified gaps and ensure a more comprehensive picture of trust beneficial ownership.

Non-UK Trusts with UK Property

One of the most significant changes is the expansion of TRS registration requirements to include non-UK resident trusts that hold UK property, even if that property was acquired before 6 October 2020. Previously, only non-UK trusts that acquired UK land on or after this date were generally required to register (unless they incurred a UK tax liability or had a UK resident trustee in an ongoing business relationship).

Under the new rules, older non-UK trusts that acquired an interest in UK land before 6 October 2020 and continue to hold that interest when the new rules come into force (30 June 2026) will be brought within scope. These affected trusts will benefit from a transitional period, with a registration deadline of 1 September 2027.

Action Item: Proactively identify any non-UK trusts among your client base that hold UK land acquired before 6 October 2020.
Action Item: Advise relevant clients about the new TRS registration requirement and the 1 September 2027 deadline.
Action Item: Be prepared to assist clients with gathering the detailed beneficial ownership information required for TRS registration (settlors, trustees, beneficiaries).

Other Important TRS Changes

De Minimis Exemption: A new de minimis exemption has been introduced for certain low-value, low-risk, non-taxable trusts, aiming to reduce administrative burdens for these entities. However, existing trusts already registered may still need to remain registered even if they fall within the new thresholds.
Bereavement-Linked Trusts: The registration deadline for certain trusts arising on death has been extended to a two-year grace period, aligning rules for various types of death-related trusts.
Data Sharing: The regulations reinforce the data-sharing rules for TRS, meaning information about a trust's beneficial owners may be disclosed in certain circumstances, particularly for non-UK trusts holding UK land.

Actionable Steps for UK Accounting Practices

The AML Regulations 2026 underscore a shift towards a more outcomes-focused and risk-based approach to compliance. Accounting firms must move beyond mere 'box-ticking' and demonstrate the effectiveness of their AML controls in practice.

Here’s a consolidated checklist for your firm:

Review Firm-Wide Risk Assessment: Update your firm's AML risk assessment to reflect these new regulations, particularly concerning EDD triggers and pooled client accounts. Ensure it accurately reflects the specific risks your practice faces.
Update Policies and Procedures: Amend your internal AML policy and procedural manuals to incorporate the refined EDD criteria for 'unusually complex' transactions, the new requirements for pooled client accounts, and the expanded TRS obligations.
Staff Training: Conduct comprehensive training for all relevant staff on the updated regulations. Emphasise the practical application of the 'unusually complex' definition and the responsibilities related to pooled accounts and TRS.
Client Due Diligence (CDD) & Ongoing Monitoring: Re-evaluate your CDD processes to ensure they capture the necessary information for the new TRS rules and are robust enough for pooled accounts. Reinforce ongoing monitoring to identify changes in client risk profiles or transaction patterns that might trigger EDD.
Record Keeping: Ensure all decisions, risk assessments, and due diligence activities are meticulously documented and retained for the statutory period. This is critical for demonstrating compliance to your supervisor.
Currency Thresholds: Note the conversion of all monetary thresholds from Euros to Sterling, simplifying application.
Off-the-Shelf Firms: If your practice offers company formation services, be aware that the sale of 'off-the-shelf' firms is now explicitly within the scope of regulated Trust or Company Service Provider (TCSP) activity, requiring full AML compliance.

Leveraging Digital Tools for Enhanced AML Compliance

Navigating these complex and evolving AML requirements can be streamlined significantly by leveraging modern digital compliance tools. Platforms designed for accountants and bookkeepers can help automate aspects of customer due diligence, risk assessment, and ongoing monitoring.

Digital Identity Verification: Utilise certified digital identity verification services to ensure robust and compliant client onboarding, especially with the Digital Verification Services (DVS) trust framework now in place.
Automated Risk Scoring: Implement tools that can help assign and update client risk scores based on a range of factors, including transaction complexity, geographical links, and beneficial ownership structures.
Centralised Record Keeping: Digital platforms provide a secure and auditable repository for all your AML documentation, making it easier to demonstrate compliance during supervisory visits. This is particularly useful for managing TRS data and pooled account information.
Workflow Management: Streamline your compliance workflows, from initial client onboarding to ongoing monitoring and suspicious activity reporting, ensuring consistency and reducing manual errors.

By embracing technology, practices can not only meet their AML Regulations 2026 obligations more efficiently but also enhance the overall integrity of their compliance framework. This frees up valuable time for your team to focus on higher-value advisory services and critical risk-based decision-making, rather than administrative burdens.

Conclusion and Future Outlook

The AML Regulations 2026 represent a targeted yet significant step in the UK's ongoing commitment to combating economic crime. For UK accounting practices, these amendments underscore the importance of a dynamic, risk-based approach to AML compliance. The shift in EDD triggers, the clarified rules for pooled client accounts, and the expanded TRS scope all demand a proactive response.

Staying informed and adapting your firm's processes now will not only ensure compliance with the latest legislation but also strengthen your defences against financial crime. As the regulatory landscape continues to evolve, particularly with future reviews of the MLRs expected in 2027, continuous vigilance and a commitment to robust AML practices will remain paramount.