Beneficial Ownership in Property Transactions: How to Trace UBOs Under Tranche 2

Most property transactions involve individuals. A meaningful share involve a company, a family trust, an SMSF or a combination of them, and in those files the hard part of customer due diligence is not the entity. It is the people behind it.

Before you start providing a designated service to a customer that is not an individual, you must establish on reasonable grounds the identity of any beneficial owners of the customer (section 28(2)(d) of the AML/CTF Act). This guide explains who counts, what the AML/CTF Rules require for each kind of property customer, and what to do when the structure will not resolve. For the legal tests in more depth, see our guides to the two beneficial ownership tests, company beneficial ownership and trust beneficial ownership.

Last reviewed: 27 October 2026

What is a beneficial owner?

A beneficial owner of a person other than an individual is an individual who ultimately owns, directly or indirectly, 25% or more of the person, or who controls the person, directly or indirectly (section 5).

That gives you two tests, and the second has no percentage. Control of a company includes being able to cast or control more than half the votes, holding more than half the issued share capital, controlling the composition of the board, or having the capacity to determine the outcome of decisions about its financial and operating policies, taking into account practical influence and patterns of behaviour, not only enforceable rights (section 11). For a person other than a company, such as a trust, control means being able to control the composition of its governing body or having the capacity to determine its financial and operating decisions in the same practical sense.

So the beneficial owners of a property buyer are not always shareholders, and the people who sign are not always the beneficial owners.

What you must establish, by kind of customer

The Act sets the matters and the Rules set the minimum information you collect. The table below covers the customers agents see most often.

For a trust, the Rules also require information about the beneficiaries, or a description of each class of beneficiary where the nature of the trust means they cannot each be identified (Rules section 6-3(3)), and about the trustees (Rules section 6-3(4)). Those are separate matters from the beneficial owners: beneficiaries are people on whose behalf the trust receives the service, and trustees act on its behalf.

Property buyers and sellers: the common structures

A company buying or selling

For an Australian company, start with the ASIC company extract and the share structure, and ask the customer’s representative to identify the beneficial owners. AUSTRAC suggests cross-referencing the ownership and control information with the company’s constitution and ASIC registers. Look through each corporate shareholder until you reach individuals, and remember the control test: a director or adviser who decides what the company does can be a beneficial owner without holding a share.

A family trust with a corporate trustee

The contract typically names a company “as trustee for” the trust. The trust is the customer, the company acts on its behalf as trustee, and AUSTRAC’s guidance says the beneficial owners may include the individual beneficial owners of a corporate trustee as well as any settlor, appointor, guardian or protector and anyone else with control. Whatever their role, the Rules require you to collect the identity of any settlor, appointor, guardian or protector (Rules section 6-3(5)). In a discretionary trust the appointor, who can usually remove and replace the trustee, is often the person with real control. Read the trust deed and any deeds of variation; AUSTRAC lists the deed, trustee resolutions and letters from the trust’s professional advisers as ways to verify the control structure. Our guide to trust KYC covers the deed in detail.

An SMSF

AUSTRAC notes that an SMSF can only be established by setting up an underlying trust, so the trust rules apply: its trustees, its beneficiaries and anyone else with control. If the purchase is funded by a limited recourse borrowing arrangement, the ATO explains that the asset is held in a separate holding trust, so the buyer on the contract can be that trust’s trustee rather than the fund’s; record which trust is your customer and how it connects to the fund. Since 10 August 2026, a new arrangement of this kind can finance real property only if it is business real property, unless contracts were exchanged before then. AUSTRAC notes that for a bare trust the beneficial owners typically include its beneficiaries. Our guide to SMSF verification covers the fund itself.

A nominee or assignee

The party who signs the contract is not always the party who takes title. A nominee or assignee who will take title is a buyer or transferee, so it is your customer for the brokering service (section 6, table 5, item 1). Complete its customer due diligence, including its beneficial owners if it is an entity, before you provide the service to it, unless every condition for delayed CDD in section 29 of the Act is met; in that case, complete it within the period in Rules section 6-32. Our off-the-plan guide covers how to build that trigger into your process.

A foreign company or trust

Overseas structures make the same tests harder to apply, not different. Enhanced customer due diligence is mandatory in specified cases, including where the customer, a beneficial owner or a person acting for the customer is a foreign politically exposed person, or where a body corporate or legal arrangement was formed in a high-risk jurisdiction for which the Financial Action Task Force has called for enhanced due diligence (section 32). Our guide to overseas buyer checks covers the practical steps.

Tracing through layers

Many property buyers are layered: a company owned by a trust whose trustee is another company. Ownership is traced indirectly, so an individual who owns 25% or more through one or more entities is a beneficial owner. A workable method:

1. Map the structure from the customer up, one entity at a time, with the source for each link (an ASIC extract, a deed, a resolution).
2. At each company, apply both tests: ownership of 25% or more, directly or indirectly, and control.
3. At each trust, identify the trustee and the individuals behind a corporate trustee, and the settlor, appointor, guardian or protector, and ask who actually makes decisions.
4. Stop tracing a branch only where you reach an individual, or where the conditions in Rules section 6-7 are met (a listed public company whose public disclosure requirements make its beneficial owners transparent, or a government body). Keep tracing every other ownership or control branch.
5. Record what you found, what you could not confirm, and why you were satisfied.

The more layers, offshore entities or nominee arrangements a structure has, the harder you should look at why. Complexity without an obvious commercial reason is a risk factor in its own right.

When you cannot identify a beneficial owner

For a company, partnership or unincorporated association, the Rules give a defined fallback (Rules section 6-8(1)). It does not apply to a trust. You are taken to have established the beneficial owners if you have:

• taken all reasonable steps to identify them, but could not
• recorded the steps you took and the difficulties you met
• collected information about the identity of the chief executive officer or equivalent
• verified, using reliable and independent data, as much of that information as is appropriate to the customer’s ML/TF risk.

If you establish on reasonable grounds that the customer has no beneficial owners, the identity of the chief executive officer or equivalent becomes a matter you must establish instead (Rules section 6-8(2) and (3)).

That fallback is not a shortcut. An inability to identify who owns or controls a buyer is information in its own right: consider whether the customer’s ML/TF risk is high, which would require enhanced customer due diligence (section 32), and whether it gives you reasonable grounds for a suspicion that must be reported (section 41).

A separate rule covers a sale you broker, for any kind of customer. If the customer is the party you are not acting for and will not cooperate, a matter, including its beneficial owners, is taken to be established once you have taken all reasonable steps to establish it, recorded those steps and the difficulties you met, and recorded your consideration of whether a suspicious matter reporting obligation arises (Rules section 6-33(2) and (3)).

What to keep on file

Your customer due diligence records must be reasonably necessary to demonstrate compliance, and include the data you collected and any analysis, risk assessment or decisions you made about the customer (section 111). Keep them until 7 years after the business relationship ends or the transaction completes. In practice, for beneficial ownership, keep the structure chart, the documents behind each link, the individuals you identified and verified, any steps that failed and why, and the officer’s conclusion.

How AML Guard helps

For a company, the beneficial ownership determination starts from its ACN, and an officer approves each determination. Identity checks, screening and officer review sit in one case record, which records each identity check, screening result and officer decision against the case.

AML Guard isn’t self-service: firms start with a demo.

FAQ

What is a beneficial owner under Australian AML/CTF law?

An individual who ultimately owns, directly or indirectly, 25% or more of a customer that is not an individual, or who controls it, directly or indirectly. Control includes practical influence over the customer’s financial and operating decisions, so a beneficial owner need not hold any shares.

Is 25% the only test for a beneficial owner?

No. The 25% ownership test sits beside a separate control test with no percentage. A person who controls the board or decides how a company or trust is run can be a beneficial owner while owning nothing, so check both tests at every layer of the structure.

Who are the beneficial owners of a family trust buying property?

AUSTRAC says they may include individual trustees, the individuals behind a corporate trustee, and any settlor, appointor, guardian, protector or other person with control. Read the deed to see who actually controls the trust; an appointor may, depending on their powers. Collect the identity of any settlor, appointor, guardian or protector, and identify beneficiaries separately.

What if we can’t identify the beneficial owner of a company buyer?

For a company, partnership or unincorporated association, the Rules let you rely on a defined fallback: take all reasonable steps, record them and the difficulties, and collect and verify the chief executive officer’s identity as appropriate to the risk. Then consider whether the gap makes the customer high risk or gives grounds for a suspicious matter report.

Do I need to identify the beneficial owners of a listed company?

Generally not. If you establish on reasonable grounds that the customer is a listed public company subject to public disclosure requirements about its beneficial owners, or is controlled by one, you are taken to have established them. You must still identify any other beneficial owners outside that deeming.

Sources

• Anti-Money Laundering and Counter-Terrorism Financing Act 2006 | Federal Register of Legislation
• Anti-Money Laundering and Counter-Terrorism Financing Rules 2025 | Federal Register of Legislation
• Initial CDD for body corporate, partnership or unincorporated association | AUSTRAC
• Initial CDD for trust | AUSTRAC
• About LRBAs | Australian Taxation Office
• Changes to limited recourse borrowing arrangements | Australian Taxation Office

Related Reading

• Beneficial owners: two tests, one 25% trigger
• Beneficial Ownership CDD for Trusts, SMSFs and Companies
• Power of Attorney and Executor Property Sales: Who Needs AML Checks?
• AML/CTF Compliance Checklist for Real Estate Agents
• What Is an AML/CTF Program?