UK beneficial ownership registers – how recent developments affect finance transactions

by Dentons


This year the UK government has introduced, updated and consulted on various measures to make the identity of those investing in the UK more transparent. Some, but not all, of these have been introduced to comply with the EU Fourth Money Laundering Directive (2015/849) (MLD4), which member states had to implement by 26 June 2017. (For a general overview of MLD4 see MLD4: Here at Last: What does it Mean?.) This note summarises these developments, and considers how they may affect financing transactions.

Amendments to the "people with significant control" regime (the PSC Regime)

The PSC Regime was launched in April 2016 to provide greater transparency on who ultimately owns UK corporate entities. Entities subject to the PSC Regime, which include most UK companies and all UK LLPs (PSC Entities), must keep a register of their ultimate owners. For a summary of the original form of PSC Regime, see What impact will the PSC Register have on banking transactions?.

The Information about People with Significant Control (Amendment) Regulations 2017 came into force on 26 June 2017, amending the PSC Regime to bring it in line with MLD4 . The main changes were:

  • PSC Entities must now update their own PSC Registers within 14 days of receiving confirmation of any relevant changes in information. Those PSC Entities not keeping a public PSC register must then record those updates at Companies House within another 14 days. Previously, PSC Entities only had to file updates at Companies House at least once ever 12 months.
  • UK AIM listed companies are no longer exempt, and so must keep a PSC register. (A separate statutory instrument has also brought Scottish partnerships partially within scope.)

The main significance of the PSC Regime from a transactional perspective remains the risk that shares subject to transaction security could be, or become, subject to a "restrictions notice". This could restrict or prevent a lender from enforcing its security over the shares (although a PSC Entity must "have regard to the effect of the notice on the rights of third parties" when issuing a restrictions notice). To address this risk, in November 2016 the LMA added a new undertaking and condition precedent to its recommended forms of leveraged finance and real estate finance facility agreements about the Obligors' compliance with the PSC Regime. These have now become market standard on finance transactions involving security over shares issued by UK companies.

HMRC trusts register

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 also came into force on 26 June 2017 as part of the UK implementation of MLD4. Regulation 45 requires HMRC to keep a register of "taxable relevant trusts". An express UK or non-UK trust will be a taxable relevant trust during any year in which its trustees are liable to pay any specified UK taxes (including income tax, capital gains tax and stamp duty land tax) on the assets or income of the trust. This should exclude, for example, any security trust in a syndicated loan transaction and any express turnover trust in an intercreditor agreement or guarantee. These types of trust do not generally generate a UK tax liability.

For trusts within scope, the trustees will need to provide various information to HMRC each year. This includes details of the trust's settlor, trustees and beneficiaries, and a statement of account describing the trust assets and their values. For existing trusts, the first deadline is 31 January 2018.

However, unlike the PSC Regime, the trusts register will not be open to the public, and a failure by trustees to provide information to the trusts register when required will not affect the transferability of any trust asset. So its introduction is likely to have a less significant direct impact on financing transactions than the PSC Regime.

Proposed beneficial ownership registers for overseas investors

In April 2017, the UK government also launched a consultation on introducing a beneficial ownership register for overseas companies that own UK property or participate in UK government procurement.  This goes beyond anything MLD4 requires. If introduced, it would be the first of its type in the world. For a general summary, see Property ownership by overseas investors: UK government begins consultation process for Beneficial Ownership Register.

Broadly, the government intends this register to work in a similar way to the PSC Regime, with Companies House administering it and information on it made publicly available. Importantly, the consultation paper also proposed that if an overseas property owner fails to comply, its UK properties will become subject to a Land Registry restriction, preventing it from selling, leasing or mortgaging them while it is in breach. This echoes the restrictions notice mechanism in the PSC Regime, with one important difference: the consultation proposed that a Land Registry restriction would be automatic following default. By contrast, the issue of a restrictions notice on shares under the PSC Regime is just an optional tool a PSC Entity can use to help it get information.

The consultation paper recognised that restrictions could unfairly prejudice third parties and proposed that they would not prevent a "legitimate lender" from enforcing security over an affected property. Nevertheless, this feature of the proposed overseas investor register will be one lenders will need to keep under review as the government progresses this initiative.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dentons | Attorney Advertising

Written by:


Dentons on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.