A nominee shareholder is entered on the register of members as the legal owner of shares but holds them for someone else, the beneficial owner, usually under a written declaration of trust. Company law registers only the nominee, but the PSC rules treat the shares as held by the beneficial owner, and the money laundering rules require accountants to identify and verify the person behind the nominee and to treat the arrangement as a risk factor.

How does a nominee arrangement work?

The nominee is the registered member. It signs share transfers, receives notices, votes and receives dividends, but does all of this on the instructions of, and for the benefit of, the beneficial owner. The terms are normally set out in a nominee agreement or declaration of trust, which is a private document between the two of them.

The company does not record the trust. Section 126 of the Companies Act 2006 says no notice of any trust, express, implied or constructive, is to be entered on the register of members of a company registered in England and Wales or Northern Ireland, or is receivable by Companies House. The register of members therefore shows the nominee, and so does anything Companies House receives about the company’s members.

Nominee holdings are common and usually legitimate: shares held by a platform or custodian for investors, shares held for a child under a bare trust, or a founder holding shares for a co founder who is not yet ready to be named. HMRC’s Economic Crime Supervision Handbook (ECSH52200) gives the example of a property developer using nominees so that rivals and landowners do not learn of its plans, and confirms such arrangements are lawful. The same handbook explains why they attract scrutiny: they can put distance between a company and the people who really control it.

Who goes on the PSC register when shares are held by a nominee?

The PSC regime looks through the nominee. Paragraph 19 of Schedule 1A to the Companies Act 2006 provides that a share held by a person as nominee for another is treated as held by the other, and not by the nominee. If the beneficial owner holds more than 25% of the shares or votes through the nominee, the beneficial owner is the registrable person and the nominee is not.

That has practical consequences. The company has to identify the beneficial owner, obtain their details and confirm them on the PSC register, even though their name appears nowhere on the register of members. The beneficial owner is also within Companies House identity verification: Companies House has said that existing PSCs must verify their identity within 12 months of mandatory verification starting on 18 November 2025.

Public companies have a further tool. Section 793 lets a public company serve notice on anyone it believes is, or in the last three years was, interested in its shares, requiring them to confirm the interest and give particulars.

What must an accountant do under the money laundering rules?

Where a client company is owned through a nominee, the Money Laundering Regulations 2017 apply in full:

  • Identify the beneficial owner. Regulation 5(1) defines the beneficial owner of an unlisted company as including any individual who ultimately owns or controls, directly or indirectly, more than 25% of the shares or voting rights. A nominee holding is an indirect holding.
  • Verify, not just record. Regulation 28(4) requires the firm to identify the beneficial owner and take reasonable measures to verify their identity, and regulation 28(9) says that relying solely on the PSC register does not satisfy that duty. The firm should see the declaration of trust or nominee agreement, not just accept the client’s description of it.
  • Treat it as a risk factor. Regulation 33(6)(a)(iv) lists a customer that is a company with nominee shareholders among the factors that must be taken into account when assessing whether there is a high risk. That does not make every nominee holding high risk, but the client risk assessment should record why the arrangement exists.
  • Check authority. Where someone purports to act for the client, regulation 28(10) requires the firm to verify they are authorised and to identify and verify them.
  • Compare with the register. Regulation 30A requires an excerpt of the register to be collected before the business relationship starts and material discrepancies in beneficial ownership information to be reported. See beneficial ownership verification.

When is the accountant’s own firm acting as a nominee?

Some practices hold shares as nominee for clients, for example through a nominee company used for client investments or start ups. Under regulation 12(2)(d)(ii) a firm that by way of business acts, or arranges for another person to act, as a nominee shareholder for a person other than a company listed on a regulated market is a trust or company service provider. The firm must then be supervised as a TCSP, and HMRC’s handbook (ECSH52200) states that firms providing nominee services are regarded as presenting an increased risk.

The same handbook makes a point that applies equally to nominee directors: legal responsibility for directors’ duties lies with whoever is recorded at Companies House as a director, even if they act only as a figurehead.

How are nominee shareholdings taxed?

For capital gains tax, section 60 of the Taxation of Chargeable Gains Act 1992 provides that where property is held by a nominee, or by a bare trustee for someone absolutely entitled, the Act applies as if the property were vested in that other person and the nominee’s acts were theirs. A sale by the nominee is a disposal by the beneficial owner. HMRC’s Trust Registration Service Manual (TRSM10030) notes that trustees of a bare trust are often called nominees, particularly where they hold shares, and that any UK tax liability on a bare trust usually falls on the beneficiaries. Dividends are therefore taxed on the beneficial owner, not the nominee.

Registration on the Trust Registration Service is a separate question. TRSM10030 says there is no specific exclusion for bare trusts, so an express bare trust should generally be registered unless one of the exclusions listed in TRSM23000 applies, for example certain arrangements created in the course of professional custody services.

How does this look for a typical client?

Illustration only. Priya owns 40% of Westbrook Ltd, but the shares are registered in the name of her brother, Raj, under a signed declaration of trust. The other 60% is held by Westbrook’s founder in his own name.

  • The register of members shows Raj with 40%.
  • The PSC register shows Priya, holding more than 25% but not more than 50% of the shares, and the founder, holding more than 50%. Raj does not appear.
  • The accountant’s CDD file for Westbrook identifies and verifies Priya and the founder, holds a copy of the declaration of trust, records the reason for the arrangement and notes the nominee holding as a risk factor.
  • Raj does not report Westbrook dividends; Priya does. If Raj sells the shares on Priya’s instructions, the disposal is hers for capital gains tax.
  • The trust is checked against the Trust Registration Service rules.

What mistakes come up?

  • Recording the nominee, not the beneficial owner, as the PSC.
  • Accepting a verbal explanation of a nominee arrangement with no written declaration of trust.
  • Relying on the Companies House register for beneficial ownership, which regulation 28(9) rules out.
  • A practice holding client shares as nominee without realising it has become a TCSP.
  • Overlooking Trust Registration Service obligations for an informal family nominee arrangement.
  • Assuming a nominee director has no personal duties because someone else gives the instructions.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.