These developments are relevant for any person who owns UK land through a structure that includes an offshore entity. Importantly, as drafted, the register will have retrospective application in England and Wales to land purchased since 1 January 1999.
The Economic Crime (Transparency and Enforcement) Bill 2022 has moved through Parliament at pace. As well as measures in relation to Sanctions and Unexplained Wealth Orders, the Bill will require that any overseas company or other legal entity (notably, this does not include a trust with no corporate body within the structure) that owns UK land, and any beneficial owner of such entity, will need to register (and keep updated annually) their details with a publicly available register at Companies House.
The definition of beneficial owner is broadly the same as under the People with Significant Control (PSC) regime for UK companies.
As currently drafted, there is an 18-month grace period from the rules coming into force, during which time beneficial owners will either need to register or sell the land.
Of course, it remains to be seen how quickly this register will be operational and whether it will be plagued by doubts over its accuracy (as has been the case with similar initiatives in the UK), but Companies House has been provided with recent cash injections to help boost its operational capacity.
In any event, individuals who directly or indirectly own or control UK land via offshore companies should take legal advice to ensure they do not fall foul of the new regime. A breach of the requirement to register will be a criminal offence under the new rules, with punishments of a fine and/or up to two years’ imprisonment.
If you would like advice on this matter please contact Sarah Cormack.