Money Laundering and Terrorist Financing (Amendment) Regulations 2026 – Key Changes

Following a consultation on improving the effectiveness of the Money Laundering Regulations, the government laid a new statutory instrument before Parliament on 25 March 2026: The Money Laundering and Terrorist Financing (Amendment) Regulations 2026.

Expected Timeline

HM Treasury expects the statutory instrument to pass through both Houses of Parliament over approximately four sitting weeks. This is likely to conclude in early June 2026, with the legislation expected to come into force 21 days later, likely in late June or early July 2026.

HM Treasury has also published an explanatory memorandum, which practices are encouraged to review in full.

Key Changes

1. Enhanced Due Diligence (EDD) – Unusually Complex Transactions

The Regulations will amend Regulation 33(f)(i) to clarify that EDD is required for “unusually complex” transactions, rather than all “complex” transactions.

This change is intended to reduce unnecessarily risk-averse approaches in sectors where transactions are routinely complex.

Accountancy practices should:

• consider what constitutes an “unusually complex” transaction within their business model;

• ensure EDD measures are applied consistently in such cases; and

• continue to assess other existing EDD triggers, including:

  • unusually large transactions; and

  • transactions with no apparent economic or legal purpose.

Examples may include complex corporate structures, transactions involving multiple jurisdictions, layered ownership arrangements, or unusual funding mechanisms.

2. Enhanced Due Diligence – High-Risk Third Countries (HRTCs)

The Regulations will narrow the mandatory EDD requirements relating to high-risk third countries.

Under the revised approach, mandatory EDD will apply only where a transaction or business relationship involves a person established in a FATF “Call for Action” country (blacklist), rather than countries on the FATF “Increased Monitoring” (grey) list.

However, practices should note that countries on the FATF grey list remain relevant risk factors when carrying out firm-wide and client-specific risk assessments.

Under Regulation 33(6)(c)(i), firms must continue to consider whether a jurisdiction is recognised as having inadequate systems to prevent money laundering or terrorist financing.

For the purposes of the Regulations:

• an individual is “established in” a country if they are resident there; and

• a company or legal entity is “established in” a country if it is incorporated there or has its principal place of business there.

3. Trust Registration Service (TRS)

The Regulations expand the scope of the Trust Registration Service (TRS) to include all non-UK trusts holding an interest in UK land or property acquired before 6 October 2020.

This addresses a previously identified reporting gap.

The Regulations also introduce a de minimis exemption for certain low-risk, low-value trusts that would otherwise require registration.

Practices advising trusts, estates, or corporate structures should review these changes carefully to ensure compliance with updated TRS obligations.

Additional amendments include:

• exclusion of Scottish survivorship destination trusts from TRS registration requirements; and

• removal of Stamp Duty Reserve Tax from the list of “relevant taxes” triggering TRS registration.

Practices are encouraged to review paragraph 5.6 of HM Treasury’s explanatory memorandum for further detail.

Other Notable Changes

The Regulations also expand the definition of Trust and Company Service Provider (TCSP) activities to include the sale of “off-the-shelf” companies.

This change is particularly relevant for accountancy practices undertaking company formation work or acting for corporate clients, as such entities may present increased money laundering risks.

Practices should ensure appropriate customer due diligence and source of funds checks are undertaken where these structures are encountered.

Required Actions

Once the Regulations come into force, accountancy practices should:

• update AML policies, controls and procedures;

• review firm-wide and client risk assessment processes;

• ensure all relevant staff receive updated AML training; and

• assess whether any trust, corporate, or company formation procedures require amendment.

Professional bodies and AML supervisors are expected to issue updated guidance and supporting materials in due course.