The Department for Business, Energy and International Strategy recently published the government’s response to its “call for evidence” last year on proposals for a register showing who owns and controls overseas companies and other legal entities that own UK property and/or participate in UK government procurement.
Overseas companies will be required to register details of their ultimate owners and the government intends to align the definition of “beneficial owner” to the definition of “people with significant control” in the PSC regime, with adaptions for overseas entities that are not similar to UK companies. Whilst this proposal is consistent with the majority of feedback received, many believe that due to the different requirements of the two registers the definitions should not be associated. The government, however, considers that the definitions should be consistent in order to avoid any contradiction of information when comparing the two registers. Guidance is expected to follow as to how overseas legal entities might interpret the requirements and take steps to identify beneficial owners.
Entities that are unable to give information about their beneficial owners will be asked to provide information about their managing officers and overseas entities that already own UK property may be given longer than the originally proposed 12 months to comply with the regime.
Offshore trusts and similar entities that own UK property, either directly or via an overseas company, are also within the scope of the regime. However, the government recognised in its response that publishing details of the beneficial owners of family trusts would undermine family confidentiality, and could put the personal safety of minor and vulnerable beneficiaries at risk. Since June 2017, the beneficial owners of taxable trusts are reportable to HMRC for a central, but non-public, Trusts Register. Offshore trusts holding UK property on which there is a UK tax liability are part of that Register. Accordingly, it is understood that the government will introduce an exemption for trusts where there is already transparency of beneficial ownership information, but we await further details.
The register will be available to view at Companies House at no cost.
A draft bill is scheduled to be published this summer with the intent that the register is operational in 2021.