Clients purchasing Australian property, investing in businesses or undertaking corporate acquisitions may be asked by their lawyers to provide identification documents, evidence of funding and details of beneficial ownership. These requests form part of Australia's anti-money laundering and counter-terrorism financing (AML/CTF) framework. Following reforms effective from 1 July 2026, AML/CTF obligations now extend to certain legal, conveyancing and other professional services. Understanding these requirements can help clients prepare the necessary documents and avoid transaction delays.
Why is my lawyer requesting this information?[AL1.1]
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), lawyers providing designated services must undertake customer due diligence to verify clients' identities, identify relevant beneficial owners and assess money laundering and terrorism financing risks. Initial customer due diligence generally must be completed before providing a designated service, subject to limited exceptions.
Which transactions require these checks?
Since 1 July 2026, these obligations have applied to certain services involving:
- Property transactions: Assisting with the purchase, sale or transfer of real estate
- Business acquisitions and investments: Assisting with certain business transfers, acquisitions and equity or debt financing transactions
- Corporate and trust structures: Establishing or restructuring companies and trusts, and providing certain related services
- Transaction funds: Receiving, holding or managing client money or property in connection with covered transactions
What documents should clients prepare?
Document requirements depend on the client's legal structure, the nature of the transaction and its assessed money laundering and terrorism financing risk. Lawyers may request additional information where necessary to complete verification.
Individual clients
Individuals may be asked to provide a passport, driver's licence or other accepted identification documents. Where someone acts on their behalf, lawyers may also require evidence of the representative's identity and authority, such as a power of attorney.
Companies Where the client is a company, lawyers may request:
- An ASIC company extract or certificate of registration, including the ACN or ARBN (for registered foreign companies).
- Shareholder registers, ownership charts or other documents identifying beneficial owners.
- Evidence of the representative's authority to act for the company.
A beneficial owner is an individual who ultimately owns 25% or more of an entity, directly or indirectly, or otherwise exercises control over it. Additional documents may be required for complex or overseas ownership structures.
Trusts
Where a transaction involves a trust, lawyers may request the trust deed and any variations, trustee appointment documents and relevant registration details. Information may also be required about individuals who control or benefit from the trust, including settlors, appointors, guardians, protectors and relevant beneficiaries, depending on the trust structure.
Source of funds and source of wealth
Source of funds refers to how money used for a particular transaction was obtained, while source of wealth concerns how a client's overall wealth was accumulated. Depending on the transaction and assessed risk, supporting documents may include:
- Bank statements, payslips or tax returns.
- Loan agreements or property and business sale agreements.
- Inheritance documents, trust distribution records or court orders.
- Gift declarations and evidence of third-party transfers.
A statutory declaration may assist where other supporting evidence is unavailable, but its sufficiency depends on the circumstances. Further, identifying the bank account from which payment is made does not necessarily establish the original source of the funds. Lawyers may request further evidence to understand how the money was obtained.
Circumstances that may trigger additional checks: [p2.1]
Additional verification may be necessary where a transaction involves complex offshore ownership structures, unexplained third-party funding, inconsistent documentation or higher-risk jurisdictions. Certain circumstances, including dealings involving politically exposed persons, may also trigger enhanced customer due diligence requirements. Additional checks do not necessarily indicate suspected wrongdoing. Instead, they reflect the lawyer's obligation to assess and manage the risks associated with the client and transaction.
Implications for Investors
Clients purchasing property, investing in businesses or undertaking acquisitions should prepare identification, ownership and funding documents early. Complex ownership structures, overseas funds and third-party contributions may require additional verification and affect transaction timelines. Lawyers may also need to update customer information during an ongoing relationship, particularly where ownership arrangements or transaction circumstances change.
Client information must be handled in accordance with applicable confidentiality, privacy and professional obligations. Legal professional privilege continues to apply where its legal requirements are satisfied. Preparing accurate documentation early can help clients meet regulatory requirements and minimise transaction delays.
References:
Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). Explanatory Memorandum, Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (Cth).
Department of Home Affairs (Cth), 'Anti-Money Laundering and Counter-Terrorism Financing' (Web Page, 1 October 2026) https://www.homeaffairs.gov.au/about-us/our-portfolios/criminal-justice/anti-money-laundering-and-counter-terrorism-financing