On 23 July 2018, the Department for Business, Energy and Industrial Strategy (BEIS) published a draft registration of Overseas Entities Bill that would require overseas entities desiring to own land in the UK to take steps to identify their beneficial owner(s) and to register them.
The Government’s objective is, by increasing transparency, to combat money laundering. As well as imposing criminal penalties for non-compliance, the Bill provides for non-compliant entities to face restrictions in the buying and selling of land in the UK.
New register to be held by Companies House
The register will be held by the Registrar of Companies and will for the most part be accessible to the public. The key points are:
- The new regime will be similar to the current persons with significant control (PSC) regime under the Companies Act 2006.
- Overseas entities that own or wish to acquire UK property would have to supply beneficial ownership information to Companies House and apply for a registration number. Registration of title to the property will not be possible without that number. Therefore, a failure to register, or to comply with the updating duty, will in most cases affect the ability of the entity to either sell or lease land or create a charge over it.
- All legal forms of overseas entity which hold property are to be within the scope of the requirements. Trusts will not be subject to the regime.
- There will be a requirement for such entities to update the register annually.
The Government has confirmed that a separate mechanism will be implemented with regard to overseas entities wishing to engage in UK central government procurement. Such entities will be required to give information about who beneficially owns them as a condition of being awarded contracts that meet certain conditions or thresholds. This information will be published separately from the information that will be published under the provisions of the Bill.
The Government anticipates that, following royal assent and the making of secondary legislation, the register will be operational in 2021.