New register of overseas ownership of UK property
Earlier this year the Government issued a series of proposals around beneficial ownership. This is partly motivated by changes to money laundering regulations due to the passing of the EU Fourth Money Laundering Directive as well as efforts to improve the transparency of ownership of companies and property.
The proposals follow on from last year’s publicly accessible people with significant control (“PSC”) register of beneficial owners of UK companies. The PSC rules require UK companies and LLPs to gather, maintain and provide Companies House with certain personal details of any person who either directly or indirectly holds (or controls) more than 25% of the shares of the company or LLP.
The new proposals would apply to the ownership of property in a very similar way to the PSC register. This would apply both to those who already hold as well as those seeking to purchase UK property. In summary, the regime would:
be applicable to all legal entities, i.e. individual and not just companies;
apply to freehold ownership of property as well as to long leases over 21 years;
require registration of beneficial ownership at Companies House in order to buy or sell UK property; and
for overseas ownership of UK real estate, require that the entity supply the beneficial ownership information within a 12-month transition period, after which any sale or any mortgage will be prohibited by way of a restriction on the Land Registry title until the owner has complied.
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