Proposal to introduce a public register of beneficial ownership

As part of its transparency agenda, the Government is proposing to introduce a public register of beneficial ownership of overseas companies and other entities holding UK property.  The compliance process is likely to be similar to that for people with significant control over UK companies and will involve the creation of a public register providing details of the beneficial owners of the entity concerned.  Without a registration number, it will not be possible for overseas companies to buy, sell, create a long lease or create a legal charge over, UK properties, whether residential or commercial.Following a period of consultation, the Government is now seeking further views on the final version of the policy and opinion on its possible effects.  The proposed new measures will require disclosures not only from foreign companies wishing to buy property in the UK for the first

Following a period of consultation, the Government is now seeking further views on the final version of the policy and opinion on its possible effects.  The proposed new measures will require disclosures not only from foreign companies wishing to buy property in the UK for the first time, but also those companies which already own relevant UK property.  Affected property will include freeholds and leaseholds with an original lease term of more than 21 years and it is intended that the policy will also extend to entities other than companies holding UK property.In order to obtain a registration number, the entity will need to lodge certain information about the identity of its beneficial owners. 

Beneficial owners will be broadly defined to include anyone who holds more than 25% of the shares or voting power, those who can control the composition of its board of directors and others who can exercise “significant influence or control”.  The Government

In order to obtain a registration number, the entity will need to lodge certain information about the identity of its beneficial owners.  Beneficial owners will be broadly defined to include anyone who holds more than 25% of the shares or voting power, those who can control the composition of its board of directors and others who can exercise “significant influence or control”.

The Government recognises that this will raise a number of issues concerning confidentiality and, possibly, personal security.  It is keen to strike the right balance between enhancing the UK’s reputation as an open and trusted place to do business with the requirement to have regulations that are workable and proportionate that do not detract from the UK being an attractive place for foreign investment.It remains to be seen how successful the Government will be in this respect, but it is clear that it remains committed to

It remains to be seen how successful the Government will be in this respect, but it is clear that it remains committed to closer regulation of the property market, which has proved to be such a lucrative source of revenue in recent years.