Beneficial ownership register of overseas companies will go live in early 2021

What changes will the register introduce?

The proposed register will require overseas companies that own or buy property in the UK to provide details of their ultimate owners, increasing corporate transparency. This is a great benefit for banks as it ensure that the UK property market is seen as transparent and also assist banks with their AML and compliance requirements to eases their administrative burden.

Currently, the proposals make no distinction between commercial and residential transactions so are likely to affect all UK real estate owned or acquired by an overseas entity. When the register goes live, banks should ensure that the beneficial ownership information of overseas entities is set out in the register because it may affect the enforceability of any security which they require against the property.

The intention is that overseas entities will not be able to buy, sell, charge or grant a long lease of property in the UK unless they are registered in the new register.

Possible exemptions?

It will be interesting to see if the Government treats non-UK EU companies or other foreign companies as exempt where there is already an accessible central register of beneficial ownership in their respective jurisdictions. It is however likely that existing properties owned by foreign companies in England and Wales will require a unique identifier number once the beneficial ownership is registered to allow land registry to update records within a reasonable time. This is likely to involve over 100,000 properties.

We should have further details of the requirements soon because the UK Government intends to publish a draft bill this summer and will introduce it to parliament by summer 2019. The aim is for the register to be implemented by early 2021