Last week the Government again re-committed to putting in place a register of beneficial owners of foreign companies and other overseas entities owning land in the UK (the Overseas Entities Register) “as soon as parliamentary time allows”.
The Overseas Entities Register was first announced in March 2016, shortly before the UK Persons with Significant Control (PSC) Register came into force in April 2016 and the then Prime Minister, David Cameron hosted an international anti-corruption summit in London in May 2016. My earlier article sets out the background and initial proposals from 2016, which came about as a result of concern over a perceived lack of transparency in relation to the ultimate owners of land in the UK where the land is registered to an overseas company or other entity.
Surprisingly slow progress has been made since 2016 in establishing the Overseas Entities Register. A draft bill was published by the Department for Business, Energy and Industrial Strategy in July 2018. When enacted, it is intended that Companies House will establish and maintain the Overseas Entities Register and provide registered entities with an “overseas entity ID”, which will be required in order to deal with the land. Where the registrable beneficial owner is an individual, the information required will be similar to that required under the PSC regime and include: name, date of birth, nationality; usual residential address and a service address (though the date of birth and usual residential address is not expected to be made publicly available).
Since 2018, the Government have reported to Parliament at least annually on progress and last week’s announcement makes it clear that the Government remains committed to the proposals, though they will not now come into force in 2021 as previously announced. While there is nothing to do for now, non-UK entities owning or intending to purchase UK real estate and their advisers should continue to monitor the progress of the Bill and where appropriate discuss the expected information requirements with beneficial owners.
The transparency requirements for trusts are more advanced and non-UK resident trusts acquiring a new interest in UK real estate on or after 6 October 2020 are required to register with the UK Trust Register. In practice, it is likely that trustees who own UK real estate will, at some point, be subject to UK tax and will therefore become subject to the normal rules for registration (and for third party access to the beneficial ownership information of the trust). The online registration service opened on gov.uk in September 2021, but the deadline for registration has now been extended to 1 September 2022.
In certain circumstances, the information on the trust register may be available to the public (although in some cases only if they can demonstrate a legitimate interest relating to money laundering or terrorist financing). We have covered these changes in depth in an earlier article.