In April 2017, the Department for Business, Energy & Industrial Strategy (BEIS) launched a call for evidence setting out proposals for a new beneficial ownership register of overseas companies that own UK property. The consultation closed in May 2017 and we await a full government response.
In the meantime, a timetable for the introduction of the register has been outlined in parliament. The Government confirmed, in December 2017, that it would be going ahead with the proposals and committed to publishing a draft bill as a catalyst for the register’s introduction. The new register makes up part of the UK’s corruption strategy for 2017-2022.
The draft bill is expected by summer 2018 and the intention is to have an operational register by 2021. Overseas legal entities will then be required to provide information on the beneficial ownership of property that they own or purchase in the UK.
Prevention
The new overseas register is required, the Government says, because more than £180 million worth of property in the UK has been investigated since 2004, with purchase proceeds coming from suspected corruption. Also it is estimated that around three quarters of properties currently being investigated engage in some form of offshore secrecy.
Following the tighter PSC rules, which were introduced in June 2017, the overseas register is another measure intended to reduce opportunities for money laundering and the purchase of UK property with ‘dirty money’.
Increasing transparency promotes trust and confidence and helps to deter money laundering. It also ensures that the UK remains an attractive place of foreign investment.
But the register could also, potentially, benefit tenants who would have the ability to ‘look through’ a landlord and obtain details on those with ultimate control of the property they inhabit.
