The UK Government has published draft legislation to implement a new public beneficial ownership register for overseas entities of UK real estate, as part of its anti-corruption policy. It will go live in 2021 and will have direct consequences for the UK real estate market.
The proposed new rules follow the introduction in 2016 of the People with Significant Control (PSC) public register of beneficial owners of UK companies, and research conducted by the department for Business, Energy and Industrial Strategy (BEIS). This is a a further step towards creating transparency of ownership of UK assets by overseas legal entities.
The Draft Registration of Overseas Entities Bill (click here to see the document) is intended to force overseas entities owning UK property to name their ultimate owners on a public register or face criminal sanctions (prison sentences of up to five years) and unlimited fines if they try to sell or lease the property without first registering the beneficial owners. The rules would apply not just to overseas companies but to ‘any non-UK registered body with legal personality that can own property in its own right’.
From 2021 it will require overseas entities to register with, and provide details of their beneficial owners to Companies House before the overseas entity can be registered as the legal owner of UK land – whether commercial or residential. The register will be publicly accessible.
The Government is inviting comments on various aspects of its draft Bill by 17 September 2018 and it is intended that the new rules will come into force in 2021.