Plans Announced for Beneficial Ownership Register
Beneficial Ownership Register to go live in 2021
The Department for Business, Energy and Industrial Strategy has announced plans to create an “overseas beneficial ownership register.”
Foreign investors in the UK property market sometimes use corporate structures as a way of obscuring their identity. The government has announced plans for a register which will reveal owners of overseas companies that buy property in the UK. The register is expected to be launched in early 2021.
World’s first public register
It will be the world’s first public register to require overseas companies to provide details of their ultimate owners if they own or buy UK property.
The register should help to reduce opportunities for criminals to use shell companies to buy UK property for money laundering. It should also make it far easier for regulators, businesses and the general public to know who the true owners of UK property are.
Ultimately, it should allow law enforcement agencies to track criminal funds and carry out effective investigations more easily.
£180 million of property in the UK under criminal investigation
Since 2004, £180 million worth of property in the UK is under criminal investigation as the suspected proceeds of crime. Of the properties under investigation, over 75% are suspected of using corporate off-shore secrecy as a disguise. Since the leak of the Panama Papers in 2015, foreign investment has come under increasing scrutiny.
Not just companies, but all overseas ‘legal entities’ will fall within the scope of the proposed new policy. The register will also provide the government with greater transparency on overseas companies seeking public contracts.
The register will also affect lenders who provide a secured loan against a UK property which is owned by an overseas entity, and fails to comply with the new register requirements. A note on the register will prevent registration of the lender’s mortgage against the property where the entity has not complied with the new register requirements.