On 5 April 2017 the UK Government published a consultation (or "call for evidence") on proposals for a new beneficial ownership register for overseas companies and other legal entities owning UK real estate. The consultation (which does not mention a target date for implementing the proposals) closes on 15 May 2017.
The consultation suggests that the UK and Scottish Governments are working together to ensure a UK-wide approach is taken in relation to the new register, which will be administered by Companies House.
The key proposals are as follows:
- A new register will be established at Companies House which will hold details of the beneficial owners of overseas companies and legal entities owning UK real estate or engaging in UK government procurement
- Registration in the new register of the personal details of "beneficial owners" of entities will be required where UK real estate is bought and sold (and where long leases of over 21 years are entered into) by overseas companies and legal entities. (The definition of "beneficial owner" will be aligned with the definition (contained in Part 1 of Schedule 1A to the Companies Act 2006) of a "Person with Significant Control" for the purposes of the existing "People with Significant Control" register for companies incorporated in the UK. Details of this definition are provided at paragraphs 31-33 of the consultation paper.)
- Once the relevant information for a particular overseas company or legal entity is registered, a change to the beneficial ownership arrangements of the entity will not, in itself, trigger a requirement to update the register, but there will be a general requirement to update the information at least once every two years
- There will be a transitional period of a year after the date the new register goes live during which overseas companies and legal entities which already own UK real estate can supply the relevant beneficial ownership information, failing which they will be prevented from selling, granting a long lease, or granting a charge over the property until they have complied with the requirements
The proposals will be of great interest to overseas entities which own (or are considering investing in) UK real estate, and we will be following developments closely.