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.
The application for registration entails providing the overseas entity’s beneficial ownership information to Companies House. If the application is successful it will be allocated a registration number. Third parties wishing to buy from or sell to an overseas entity will be able to check the online register free of charge to ensure that the entity is registered. It will be a criminal offence to provide false or misleading information when applying to register.
Property already owned by an overseas entity
Overseas entities who already own property will be given a year to register their beneficial ownership details in the new register – or to sell their property if they do not wish to disclose information about their beneficial ownership. The government intends to write to all overseas entities that own UK property before the law comes into force, setting out the requirements and the consequences of not complying. At the end of the transitional year, any overseas entity owning property in the UK will be prohibited from selling the property, or creating a long lease or legal charge over it, if they have not complied with the new register’s requirements. A note to that effect will be added against the registered title of the property.
Some overseas entities who already own property may have no plans to sell, grant a long lease or charge their property so may have no incentive to register. The government is considering whether to make it a criminal offence to fail to register or, where registration has taken place, to fail to keep the information on the register up to date.
Overseas entities wishing to buy or take a lease of over 21 years
Entities wishing to buy or take a long lease of property will have to apply to register their beneficial ownership information at Companies House before they do so. If the application is successful they will be allocated a registration number which must be provided when applying to register their title to the property at HM Land Registry. The Land Registry will not register the title of an overseas entity without a valid registration number, which would mean that the entity would not become the legal owner as it is registration that confers a legal title.
The government is also exploring the option of making the transfer of title document void if an overseas entity buying a property does not have a valid registration number at the time of completion.
On registration at the Land Registry, a note will be added against the title reflecting the restriction on selling, granting a long lease or charging the property if the new register’s requirements have not been complied with.
The new register will operate in a similar way in relation to government procurement contracts. Overseas entities that wish to take part in central government procurement contracts would need to register beneficial ownership information at Companies House. The proposal is that this should only apply to procurements valued over £10million.