UK Beneficial Ownership Register for Overseas Entities Holding UK Property

• United Kingdom

• Real estate
• Real estate sector

26-01-2018

The UK government has announced that it will proceed with its proposals to require that all overseas entities that own or buy property in the UK complete a register detailing their ultimate beneficial owners.  The proposals are seen as an anti-money laundering measure and it is intention that the register would go live early in 2021.  A draft bill is to be introduced into Parliament this summer, with formal introduction of the bill in summer 2019.   The government’s response to its 2016 call for evidence will be published shortly.  The proposed requirements would also extend to any overseas companies or entities that wished to participate in UK government procurement.

The new register will sit alongside the UK’s PSC register – the register of persons with significant control - by which all UK companies have to collect and keep information on those who ultimately own and control them.  The vast majority of the PSC register is publicly accessible and fully searchable, and the government’s previous call for evidence on the new proposals made it clear that it is the intention that the new register will be similarly public and also administered by Companies House.

The 2016 call for evidence paper also:

• suggested that the requirement to register would apply to all those who held leasehold interests of over 21 years in UK land, as well as freehold ownership;
• considers that the definition of beneficial owner should be the same as that used in the PSC register e.g. those that hold directly or indirectly over 25% of the shares or exercise directly or indirectly over 25% of the voting rights, those that can appoint or remove the majority of the board or those who have the right to exercise, or actually do exercise, significant influence or control over an entity;
• proposed giving overseas entities that already hold UK property one year to assemble the required information, submit that information to the register and acquire a registration number – with the intention that such entities would have the opportunity to sell the UK property they hold if they did not wish to register;
• proposed that the registration number would have to be supplied to HM Land Registry when an overseas entity applied to be registered as the proprietor of UK property, along with the suggestion that perhaps the transfer to the overseas entity would be in itself void if the entity did not have a valid overseas registration number at the time;
• plans to note on the HM Land Registry title of properties owned by overseas entities that they will not be able to sell or let or mortgage their properties unless they comply with the requirements of the register;