It was back in 2017 that the UK government announced plans to introduce a public register revealing the owners of overseas entities buying and owning property in the UK. In 2018, the timetable was set – the register would be introduced and go live by 2021. As we get into the swing of 2022, the register may not yet have materialised but momentum is once again gathering to push through reforms to increase transparency around land ownership in the UK.
To recap, the draft Registration of Overseas Entities Bill (Bill) was published, though not laid before Parliament, in 2018. The Bill set out a legal framework to establish a public register of beneficial ownership of overseas entities that have certain interests in land in the UK (UK Register). The proposal was that the UK Register would be kept by Companies House and would be similar to that of the current requirement for UK companies to maintain a register of persons of significant control. More details of the Bill can be found in our previous alert.
The proposals for the UK Register set out significant changes for overseas entities who own, or may seek to acquire, land interests in the UK. Those changes are likely to be all the more significant if the proposals for civil and criminal sanctions are pursued (including restrictions on being able to dispose of property).
So while things may have gone a little bit quiet since the Bill was published in 2018, the following recent and upcoming events all suggest we may see progress in establishing the UK Register in 2022.
- In December 2021, Lord Calnan, in response to a question from the Labour peer Lord Haworth, confirmed that the "government remains committed to establishing a new beneficial ownership register of overseas entities that own property".
- A Private Members' Bill on this topic has just been introduced to Parliament by Liberal Democrat MP, Layla Moran. While it is unlikely to make it onto the statute book, this development is another indication of cross-party support for the Register.
- From 1 April 2022, the Scottish Register of Persons Holding Controlled Interests in Land (RCI) is due to come into force. This now includes obligations for overseas entities with interests in land in Scotland, to disclose those persons who hold a significant interest or control in their decision-making. It is anticipated that, once the UK Register comes into force, the Scottish RCI provisions for overseas entities will be removed so as to avoid the need to double report. However, the fact that from April overseas entities holding interests in one part of the UK will have to disclose their decision-makers in a public register will surely only strengthen the case for implementing this transparency regime UK-wide.
The above is positive, but it remains to be seen whether parliamentary time will be scheduled to allow this important legislation to be debated.