The government is going ahead with plans to create a register of UK property owned by foreign companies with the launch of a six-week consultation on the proposals for a property register
The consultation sets out proposals for a new beneficial ownership register of overseas companies that own UK property or participate in UK government procurement. It seeks views on the design of the policy and evidence on the possible effects of the policy. The new register is likley to mirror the current beneficial ownership register with similiar requirements.
Growing concerns about the use of property to disguise ownership and financial assets sees the government taking a tough stance on overseas corporate property vehicles.
The BEIS consultation states: ‘The use of offshore corporate vehicles to obscure the true owners of UK property has attracted those who wish to hide illicit funds and launder the proceeds of crime. Between 2004 - 2014, over £180m worth of property in the UK has been investigated as suspected proceeds of corruption.’ [Source: Data from cases investigated by the Metropolitan Police Proceeds of Corruption Unit between 2004 and 2014]
The proposals are intended to apply across the UK including the devolved administrations, subject to agreement.
The consultation covers a broad range of issues from definition of leases, similar scope to the company beneficial ownership register to the proposal to set a 21-year leasehold definition.
It is also seeking views on whether entities that are not similar to UK companies limited by shares should use these adaptations to identify their beneficial owners and whether the adaptations provide sufficient flexibility in the beneficial owner conditions to apply to most legal entities.
The plan is to set a one-year window for overseas companies to register their property ownership details with a legal requirement to update details every two years.
There is also recognition that there could be compliance issues and the consultation wants feedback on what additional information entities that are unable to give information about their beneficial owners should provide, to ensure that the register is effective.
The decision to proceed with the register was announced in the House of Lords on 3 April during a debate on amendments to the Criminal Finances Bill.
The closing date for comment is 15 May 2017. Responses should be sent to transparencyandtrust@beis.gov.uk
The BEIS consultation, Property ownership and public contracting by overseas companies and legal entities: beneficial ownership register consultation, is available here