UK considers creation of a register of beneficiaries of overseas companies owning real property
Today the United Kingdom is the world leader in corporate information transparency. In June 2016 it became one of the first countries which implemented the central and publicly available register of companies’ beneficial owners (‘persons with significant control’).
One of the new steps in this field may be establishing a register of beneficial owners of overseas (i.e. not British) companies which own real property within the UK. The title to such property often belongs to foreign (including offshore) companies, the ultimate owners of which are usually unknown.
The existing register of ‘people with significant control’ allows to track the ultimate owners of real property only in cases where a British company is its registered proprietor. A company name may be checked through the Land Register, while the beneficiaries may be identified through the Companies House. However, this is impossible in respect of foreign companies yet.
To address that issue the Government proposes to introduce a register of beneficial owners of foreign companies owning real property in the UK, and of foreign companies participating in public contracts with the Government.
It is expected that foreign companies of all (or the majority of) legal forms, which register title to real property in the UK or participate in public contracts, will be required to declare their beneficiaries. Foreign legal entities that already own the property in the UK will be given a transition period (one year) to decide either to disclose information of their beneficiaries or to alienate the property. Foreign companies failed to disclose their beneficiaries for entry in the new register will be unable to buy or sell real property situated in the UK.
Overseas company’s beneficiary for the purposes of the new register will be determined by the same criteria as a ‘person with significant control’ for the UK companies.
Like the register of ‘persons with significant control’, the new register will be available for free view by any persons through the Companies House website. Therefore, the counterparties to transactions and other interested persons will be able to check online who is a beneficiary of foreign company which owns or intends to buy real property.
The framework of the new register is currently under preliminary discussion, and the terms of its implementation are undefined.