The two ways someone is a beneficial owner
Both tests matter. A person with no shares at all can be a beneficial owner: a trustee making decisions for a trust, an appointor who can hire and fire the trustee, a director with casting control, or anyone whose instructions the company habitually follows.
- Ownership: holding 25% or more of the client, directly or indirectly through layers of entities
- Control: controlling the client through other means — regardless of any shareholding
Walking layered structures
When an entity owns an entity, ownership multiplies down the chain. If Holding Co owns 60% of Op Co and Person A owns 50% of Holding Co, Person A's effective interest in Op Co is 30% — over the threshold. The discipline is to keep walking until every chain ends at humans, recording each link: who owns what percentage of whom, from which source (ASIC extract, trust deed, register).
- Map the full structure on one page before calculating anything
- Compute effective percentages along each chain, then aggregate per individual
- Record the source for every holding: document type, number and date
- Watch circular holdings — structures that reference themselves need manual judgment, flagged for review
Trusts: where control lives
- Trustees and representatives: collect and verify the information required for the customer type, including relevant individuals behind a corporate trustee, subject to any applicable simplified or deemed-verification rule
- Appointor / guardian: can remove the trustee — often the most powerful role in the deed
- Settlor: established the trust — identify, noting their ongoing influence varies
- Beneficiaries and persons on whose behalf the service is received: identify each beneficiary or, where the trust's nature makes individual identification impossible, describe each beneficiary class
When nobody reaches 25%
First test control after working through ownership. If no beneficial owner exists, or none can be established after the required steps, apply Rules 6–8 by establishing the CEO or equivalent. Do not label that fallback person a beneficial owner unless the ownership-or-control definition is independently satisfied. Record the searches, evidence and reasoning rather than leaving a blank field.
What good UBO evidence looks like
Cassandra AML's ownership register and calculator do the arithmetic transparently — every result labelled as calculated from recorded holdings, never as a legal determination — so the file shows its working the way an examiner expects.
- The structure map with percentages and control roles, dated and sourced
- Verification of each identified individual: identity checked, screened for sanctions and PEPs
- The calculation trail for indirect ownership, not just the conclusion
- A refresh trigger: ownership changes, controller changes, and risk-based review dates
- Seven-year retention of everything above
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Is 25% measured per chain or in total?
Both. An individual over 25% on any single chain is in, and aggregated effective ownership across multiple chains counts too. Calculate along each chain, then sum per person.
Do we have to identify beneficiaries of a discretionary trust?
For a trust customer, establish the persons on whose behalf the service is received by identifying each beneficiary or, where the trust's nature makes individual identification impossible, describing each beneficiary class. Separately identify trustees, representatives and beneficial owners or controllers under the applicable customer-type rules.
What if the client will not disclose their structure?
You cannot complete customer due diligence and must not provide the designated service. Ownership disclosure is not negotiable under the regime.
How often should UBO records be refreshed?
Set risk-based periodic-review frequencies in the AML/CTF program and review following ownership or controller changes, material events, unusual activity or doubts about KYC information. AUSTRAC does not prescribe one universal high-, medium- and low-risk calendar; record why the selected frequency is proportionate.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser. See our editorial and correction standards.