Beneficial ownership — the trickiest part

A beneficial owner is the natural person who ultimately owns or controls a customer. The threshold under the AML/CTF Act 2006 (Cth) and the AML/CTF Rules 2025 is 25% or more ownership or control, directly or indirectly. Where no individual meets the 25% threshold, the Rules require you to identify an alternative individual — typically the senior managing official who effectively controls the customer.

For a simple Australian proprietary company, identification is usually quick. Pull the ASIC extract, identify shareholders holding 25% or more, verify those individuals.

For trusts and layered structures, it gets harder.

Trust → corporate trustee → directors → beneficial owners. A common pattern is a discretionary family trust whose trustee is a corporate trustee, itself a Pty Ltd owned by a holding company. To identify the beneficial owners, you trace the chain: who controls the trust (typically the appointor), who are the trustees, who controls the corporate trustee (directors and shareholders), and who ultimately owns the holding company. The beneficial owners are the natural persons at the end of that chain — and there can be more than one.

For unit trusts, unit holders with 25% or more are beneficial owners. For discretionary trusts, the appointor (or whoever has the power to remove the trustee) is generally treated as a controller, and beneficiaries who have actually received material distributions may also need to be identified.

When ownership is opaque. If you cannot identify beneficial owners from the available documents, you must take "reasonable measures" — statutory declarations, certified extracts of trust deeds, independent legal advice. If reasonable measures still cannot establish ownership, the relationship cannot proceed and the matter should be considered for an SMR.

ECDD triggers from beneficial ownership. Enhanced customer due diligence is required when:

• A beneficial owner is a foreign PEP
• A beneficial owner is from a FATF "Call for Action" jurisdiction (currently Iran, DPRK or Myanmar)
• The structure looks designed to obscure ownership (multiple layers, nominee shareholders, opaque foreign entities)
• You cannot satisfactorily identify all 25%-plus owners

Domestic or international-organisation PEP beneficial owners do not automatically trigger ECDD unless the customer is independently high-risk.

Many residential vendors and buyers are individuals. But every commercial transaction, every developer and every investment buyer raises beneficial-ownership questions that require tracing through corporate and trust structures.

What to do next. When taking on a corporate or trust customer, request the trust deed and ASIC extract before signing the agency agreement. Resolve the beneficial-owner chain before you start providing the designated service.