September 4th, 2018

Draft Legislation Published for the UK Register of Overseas Entities

The Government has recently published a draft of the proposed Registration of Overseas Entities Bill which sets out the basis for setting up a new beneficial ownership register of overseas entities that own UK property.

The draft bill follows the 2016 Anti-Corruption Summit in London which committed the UK to establishing a register to combat money laundering and achieve greater transparency in the UK property market.

In brief, the Bill requires any overseas entity that wishes to own land in the UK to take steps to identify their beneficial owners and to register them. On registration, the overseas entity will be granted an overseas entity ID and will be required to update their information annually.

Key Points

Companies House will be the registration authority.

The criteria for establishing the identity of the beneficial owner are modelled on the PSC (Persons with Significant Control) regime for UK companies and other UK entities.

Failure to register will mean that the overseas entity will be unable to register as proprietor of land in the UK and will therefore be unable to obtain full legal title.

It is anticipated that the register will be implemented in 2021.

Overseas entities that already own UK property will have 18 months grace period to provide information for the register.

The information on the register will need to be updated every 12 months.

Considerations for UK companies and Individuals

Any individual or UK company entering into a property transaction with an overseas entity will need to check that the entity is registered and that the registration is up to date at both the outset and when the transaction is completed.

Individuals or UK companies who co-own property with an overseas entity will need to ensure that the overseas entity maintains their register to ensure compliance with the register, as failure to comply would affect their ability to sell, lease or charge the asset.

Views are now being sought on the bill and consultation closes on 17 September 2018.

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