We have written previously about the plans to introduce a beneficial ownership register for UK properties owned by overseas companies and legal entities. Currently, whilst the land registry shows the legal owner of a property, it does not show who is the beneficial owner of such property. How close is the beneficial ownership register to coming into force and what has happened in the 54 months since this policy was launched by David Cameron? The commentary below demonstrates how lengthy the process from policy statement to Royal Assent can be.
The policy of having a register of beneficial ownership of properties was launched in mid-2016 with a view to cementing the UK's status as a world leader in corporate transparency and attracting investors to the UK. Since then, there have been various consultations, but no law "on the books".
In 2017, there was a consultation about the design of the beneficial ownership register. In 2018, the UK government announced its intention for the register to be operational by 2021, the three-year timeline being considered necessary to ensure the technical details underpinning the register, including the interaction with the land registration, would be correctly implemented.
A draft bill was published in July 2018. This had provisions that linked registration of a beneficial owner with the issuance of an overseas entity ID, which would be needed by the legal owner of the property to register title to land.
The draft bill was scrutinised and, in May 2019, the report of the Joint Committee recommended some changes. Many of these were accepted by the government when it responded to the report but, ominously, there was no mention of timing of implementation.
This is without doubt a complex issue and not one that has been tackled before anywhere in the world. The legislation will need to strike a balance, enabling it to achieve its aims and at the same time having consequences for non-compliance that are sufficient to act as a deterrent.
In the meantime, other jurisdictions have been taking steps of their own. The governments of British Columbia and Quebec have each recently brought in legislation requiring registered owners of land in those provinces to disclose information about the beneficial owners of such land, if they are different from the registered owners.
Questions have been asked in Parliament as to timing. The most recent response, on 3 February 2021, was that the government will legislate when Parliamentary time allows. Obviously, in the midst of the pandemic, there is a lot of additional Parliamentary business to get through in addition to the usual workload.
It is hoped that this year, when the UK has taken on the Presidency of the G7 group of nations, is the year that the beneficial ownership register comes into force and the UK, currently ranked 11 on the Corruption Perception Index1, moves closer to Denmark and New Zealand at the top of the index.
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