Why Your Accountant Is Asking More Questions: New AML Rules Explained for Smith Shearer Clients
Succession planning - passing the farm on to the next generation - is one of those things most farmers know they should do, but few actually start. It’s not just about who inherits what; it’s about keeping the farm running, protecting family relationships, and making sure everyone’s financially secure.
(TLDR, (too long, don’t have time to read)? See our quick skim-through infographic here).
For Smith Shearer clients, this means that in some situations we’ll need to ask more detailed questions than we have in the past, even if you’ve been a client for many years and even if nothing unusual is happening.
These requirements apply to all accounting firms, not just Smith Shearer.
If you’re thinking:
“We’ve done this before, so why now?”
or
“Why do I suddenly need ID for this?”
It’s most likely due to the new AML legislation.
Does this apply to you?
You’re most likely to notice these changes if you are doing any of the following:
- Transferring part of a farm or business to family members
- Planning succession or retirement
- Restructuring companies or trusts
- Setting up a new company or trust
- Lending or borrowing funds within a family group
- Buying or selling a business
These are all normal, sensible business decisions. They’re also the types of activities the new AML rules now apply to.
What’s actually changed?
The short answer is this:
Accountants are now legally required to collect and document more information when helping with certain transactions.
This doesn’t mean anything is wrong. It doesn’t mean there is any concern about your business. It simply means we must be able to clearly show:
- Who owns and controls an entity
- Why a transaction or change is happening
- That the structure or arrangement makes commercial sense
In the past, much of this was understood through long-standing relationships. From July, it must also be formally documented.
What does this look like in real life for Smith Shearer clients?
Here are some common Smith Shearer scenarios where clients may notice extra questions.
Succession and family ownership changes
For example:
- Transferring shares or trust interests to adult children
- One family member exiting the business
- Gradually handing control to the next generation
We may need to ask:
- Why the change is happening now
- Who will ultimately control the business
- How the transfer is being funded
This helps ensure the transaction is transparent and properly supported.
Restructuring companies and trusts
This includes situations such as:
- Setting up a new trust for asset protection
- Separating land ownership from operations
- Interposing a company into an existing structure
From July, we must clearly record:
- The commercial or tax reason for the structure
- Who the beneficial owners are
- Any material changes to control or decision-making
For clients, this may feel like explaining things that were previously “just known”.
Registered office addresses and formal roles
Many clients use Smith Shearer for:
- Registered office addresses
- Company secretarial support
- Corporate trustee arrangements
Under the new rules:
- Proof of identity becomes a standard requirement
- We must be comfortable we understand who is behind the entity
This applies even for long-term clients.
Family loans and funding arrangements
This is particularly common in farming and agribusiness.
Examples include:
- Parents lending funds to children to buy into the farm
- Related-party loans for seasonal cashflow
- Shareholder funding for land or equipment purchases
In these cases, we may need to ask:
- Where the funds came from
- How the arrangement fits within the broader structure
- Whether terms are documented and commercially reasonable
These checks protect everyone involved.
What should you expect?
Going forward, you may notice:
- Requests for identification documents
- More questions around restructures or ownership changes
- A little more time needed upfront to gather information
This applies to all clients and does not indicate any concern about your affairs.
Why this is actually a good thing
While the process may feel more detailed, these changes:
- Reduce the risk of issues later with banks, regulators or buyers
- Encourage clearer documentation and decision-making
- Protect clients during major transitions like succession or sale
In many cases, they reinforce good practices clients are already following.
How Smith Shearer is preparing for the new AML requirements
We’re preparing for these changes now and updating our processes so we can continue to provide clear, practical advice with minimal disruption.
Our focus is on:
- Explaining what’s required in plain language
- Asking questions early, not late
- Making compliance part of good planning, not an obstacle
If you’re considering a restructure, succession change, business sale or new entity setup this year, it’s worth talking to us early so we can guide you through what will be required.
What you can do now
- Keep the 1 July 2026 start date in mind when planning changes
- Let us know early if you’re planning a restructure or succession change
- Be prepared for ID requests as part of standard processes
- Ask questions if you’re unsure why information is needed
If you have any questions about how these changes apply to your situation, please get in touch with the team.
