The Government have published a call for evidence on proposals for ‘A register of beneficial owners of overseas companies and other legal entities’.

In April 2016 the new Register of Persons Significant Control (‘PSC’) register was introduced.  This requires all UK companies to provide information about their PSCs to Companies House on an annual basis.

The call for evidence seeks views on proposals to establish a similar register for overseas companies and legal entities that:

  • Own UK property, or
  • Participate in UK government procurement.

The new register would:

  • Be held by Companies House.
  • Accessible to the public free of charge.
  • Extend to all non-UK legal entities (not just companies) that can hold property or bid on central government procurement contracts.
  • Use the same definition of beneficial ownership as the PSC register, and require the same information.
  • Have to be updated at least once every two years.
  • Carry a range of criminal / civil sanctions for non-compliance, providing false information etc.
  • Have a protection regime: individuals can apply to have their information supressed where there is a risk of violence or intimidation.

The UK property proposals:

  • Include both commercial and residential property freeholds and leases over 21 years.
  • Would prevent overseas entities from buying or selling UK property unless they have provided information in the new register.
  • Apply to both future purchases and existing holdings: entities already owning property in the UK would be given a year to comply.

The procurement proposals:

  • Require entities that wish to take part in central government procurement to supply beneficial ownership information before the contract can be finalised.
  • Only apply to contracts over £10m.
  • Only apply to new government contracts, and not those already procured or where procurement procedures have started before the rules come in.

Links

Our subscriber guide:

Register of Persons with Significant Control

The call for evidence document can be found here.

Summary of consultation questions

Objectives, scope and impacts

1.       Do you agree that all legal forms that can hold properties should be in the scope of the new register’s requirements? If not, what legal forms should we consider an exemption for and why?

2.       Is the suggested definition of leasehold appropriate?

3.       Will setting the leasehold definition at leases over 21 years create any unintended consequences?

4.       Do you agree that the definition of beneficial owner for the new overseas register should be aligned to the definition of PSC in the PSC regime?

5.       Do you agree that entities that are not similar to UK companies limited by shares should use these adaptations to identify their beneficial owners?

6.       Do these adaptations provide sufficient flexibility in the beneficial owner conditions to apply to most legal entities? If not, what additional adaptations should there be?

7.       What methods of raising awareness would be most effective?

8.       Do you have any information that is relevant to our assessment of the cost and benefits of the policy to businesses, society and the economy?

9.       What, if any, impact do you think that the proposed policy would have on the UK property market (residential and commercial)? Please describe the impacts and provide evidence.

Registering information – property

10.   Do you agree that the duration of the period given to overseas entities to comply with the new requirements should be one year?

11.   Is the system of statutory restrictions and putting notes on the register, backed up by criminal offences, a comprehensive way to ensure compliance?

12.   Do you agree that we should prevent any beneficial interest in the property passing to an overseas legal entity that does not have a valid registration number at completion or settlement?

13.   Do you agree that the most appropriate way to do this would be to void the transfer document?

14.   Is there another way that we could achieve this result?

Registration – procurement

15.   Which is your preferred option for procurement and why?

Required information

16.   Do you agree that the information on the new register for overseas entities should be the same as the information required under the PSC regime?

17.   Do you agree that entities unable to give information about beneficial owners should be asked to provide information about their managing officers?

18.   Is there any additional information that we should ask for from entities unable to give information about their beneficial owners?

Keeping the information on the register up-to-date

19.   Is a requirement to update every two years appropriate?

20.   Would a criminal offence be an appropriate way of enforcing the requirement to update information?

Compliance

21.   Do our proposals achieve the right balance between ensuring compliance and enabling overseas entities to maintain existing assets?

22.   Are these mechanisms enough to deal with situations where bidders provide false beneficial ownership information or do not keep their ownership information up to date?

Protection regime

23.   Do you think that this provides the correct balance between protecting individuals from harm and ensuring transparency of how properties are owned?

24.   Are there additional situations we should consider where protections should be granted?

25.   Are there other situations where exemption from putting information on the register should be permitted for entities participating in procurement?

Third party protections

26.   How can we best ensure that only legitimate lenders are able to repossess and dispose of property with a restriction against it?

27.   We are interested in views and evidence of other commercial transactions that could be disrupted by the proposed restrictions regime.

28.   Are there additional third party impacts that should also be addressed?


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