Introduction and timeframe

The UK Government has published further details on its proposed register of beneficial owners of overseas entities and the implications for conveyancing. Please see here.

The Government recently issued its response to the call for evidence on its proposals for a register at Companies House showing who owns and controls (the beneficial owners of) overseas companies and other legal entities that own UK property or participate in UK government procurement. The Government will develop legislation to create the new register and intends to publish a draft Bill this summer and that the register will be operational in 2021.

The response sets out how the Government intends to implement the register. An essential aspect of the register is that it is publicly and easily accessible in order to improve the transparency and accountability of overseas legal entities operating in the UK.

Controlling land registration as means of ensuring compliance

A crucial means of ensuring compliance with the new register’s requirements is through controlling the selling, letting or mortgaging of the overseas entity’s properties registered at the Land Registry/Registers of Scotland through the use of statutory restrictions. The Government has confirmed that all properties that are freehold or leasehold of registrable duration (basically for a term over 7 years for England and Wales, over 20 years for Scotland and over 21 years for Northern Ireland) will be within the scope of the new register’s requirements.

It is not clear from the Government’s response whether there are to be any carve outs for lenders repossessing and disposing of a property with a restriction against it.

Operation of beneficial ownership register

All legal forms that can hold property will be in the scope of the new register’s requirements, but there will be flexibility to allow exemptions for types of entity if for example there is already transparency of beneficial ownership information such as in a trusts context.

The definition of beneficial owner will be aligned to the definition of “people with significant control” (PSC) in the PSC regime for UK companies. For entities that are not similar to UK companies listed by shares, there will be adaptations to identify the beneficial owners. The information required for the new register will be the same as that required under the PSC regime.

Overseas entities that are unable to give information about their beneficial owners will be asked to provide information about their managing officers.

The Government’s original proposal was that the information on the register would have to be updated every two years. Following the call for evidence, it is considering increasing the frequency of the update and will set out its preferred approach when publishing the draft legislation. There will be a criminal offence to enforce the requirement to update the information, to ensure there is an effective sanction for those entities with no plans to sell, lease or mortgage their property.

Overseas entities that already own UK property will have longer than one year from when the new regime goes live to comply with the new requirements and the precise timeframe will be publicised in due course.

Other property implications

As mentioned, there will be a system of statutory restrictions and notes on the register at the Land Registry/Registers of Scotland, backed up by criminal offences, to ensure compliance with registration requirements on the new beneficial ownership register.

For overseas entities buying UK property after the new legislation comes into force, the beneficial interest in, but not legal title to, the property will pass to an overseas entity that does not have a valid registration number (for the beneficial ownership register) when the property transfer is completed.

A clear majority of the respondents to the call for evidence considered that voiding the transfer (so that the beneficial interest would not pass) was not the most appropriate way to ensure compliance. It could create complexities and have damaging consequences for innocent third parties. Preventing legal title from passing (by preventing registration at the Land Registry/Registers of Scotland unless the statutory restriction is satisfied) is a sufficient deterrent against non-compliance.

The Government is confident that pre-existing contractual and statutory rights will be protected. Concerns had been expressed at the impact of the new restrictions regime on matters such as land options and pre-emptions, co-ownership, collective enfranchisement and joint ventures. The Government is developing the policy to ensure compatibility with insolvency procedures.


In terms of UK government procurement, the Government intends to require the preferred supplier to provide its beneficial ownership information as a condition of being awarded the relevant contract.

Next steps

The next step is publication of the draft legislation this summer when further flesh will be put on the bones of the Government’s proposals.