For many years, people have been able to purchase properties in the UK anonymously by using offshore companies and trusts. Pressure has been building to make ownership more transparent for some time, however, in recent weeks, in response to Russia’s invasion of Ukraine, things have become more urgent and the Government is rushing through a bill that will force such entities to disclose on public record all the details of ownership, including the Ultimate Beneficial Owners (UBOs). Many of the details of the new bill are available on this UK government factsheet.
Who are the Ultimate Beneficial Owners?
The key here is the U for Ultimate. The legislation seeks to ignore all of the intermediate layers of ownership and identify the Ultimate Beneficial Owners. The UBO is the final person who satisfies at least one of these conditions –
- Own more than 25% of the shares in the property.
- Own more than 25% of the voting rights.
- Own the right to appoint or remove a majority of the board of directors of the property.
- Has the right to exercise significant influence or control over the property.
Any overseas person that owns a UK property will need to register. The details of the UBO required for registration include their –
- date of birth
- usual residential address.
Once registered, an overseas entity ID number will be provided, and the entity will be required to update its information annually. This applies until the entity successfully applies to be removed from the live Register of Overseas Entities.
What will happen if the UBO Is not provided?
An entity will have one month to respond to the request for information. If, after that period, they fail to provide it, without reasonable excuse, they will be charged with an offence and face imprisonment, a heavy fine, or both.
Are there any entities that might be exempt from registering?
There are a few instances where UBO registration is not legally required. Examples include –
- Under certain circumstances, if an overseas entity cannot provide complete information about its UBO, then information about its managing officers will be required instead.
- Where the overseas entity is already providing beneficial ownership information to a register in their own country of formation and where the UK Government considers that Register to be equivalent to its own overseas entities register.
Will the new regulations be retrospective?
These regulations will apply to all property where the overseas entity registered the title on or after January 1st 1999.
Once the Bill passes into law, it will become standard conveyancing practice, where transactions involving overseas entities, to conduct a search of the Register to ensure compliance.
Ask the tax experts
Here at AccountsCo, we support non-UK residents with all kinds of issues relating to UK property ownership and tax. We’re here to help. So for expert guidance on these and other accounting, company or property matters, get in touch. But please note – we insist our clients follow the rules 100% to the letter.
Overview For many years, people have been able to purch […]