UK property held by a Jersey Legal Entity.
Overseas legal entities which already own* or lease or wish to buy, sell or transfer UK property must register with UK Companies House by 31st January 2023 and provide details of their beneficial owners and managing officers.
Relevant legal entities include Jersey companies and partnerships and other legal persons recognised under Jersey law.
Entities must take steps to identify beneficial owners. Registrable beneficial owners in the overseas entity include individuals and other legal entities that:
– directly or indirectly own more than 25% of the shares or voting rights.
– can appoint or remove a majority of the board of directors; or
– have the right to exercise or actually exercise significant influence or control,
as well as trustees of a trust fulfilling one of the above conditions.
The information must be verified by a UK-based agent, which is supervised under UK anti-money laundering regulations – many UK law firms will be able to assist with the process. Thereafter the information must be provided via the Companies House website. Guidance is available online. https://www.gov.uk/government/news/the-new-register-of-overseas-entities-is-live.
Overseas entities which have disposed of all UK property since 28 February 2022 do not need to register but must supply the date of disposal and the relevant title number to Companies House.
The Land Registry will place restrictions on transferring or leasing property (and creating security over it) where relevant entities fail to comply with the legislation. Criminal penalties also apply.
The register is modelled closely on the register of persons with significant control (PSC Register) introduced for UK corporate entities in 2016. The legislation provides that most of the information supplied to Companies House shall be available on the public register.
The concept of open public access to beneficial owner registers has been challenged in the EU recently, with the European Court of Justice issuing a preliminary ruling at the request of the Luxembourg District Court that the provision of the EU anti-money-laundering directive requiring that information on the beneficial ownership of corporate and other legal entities incorporated within member states be accessible in all cases to any member of the general public is invalid.
The ECJ took the view that the general public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data under the Charter of Fundamental Rights of the European Union (the “Charter”). If followed, the effect of this ruling is thought to be that access to publicly held beneficial ownership information should be limited to those who could prove a legitimate interest in gaining such access. We watch this area of law with interest.
While the UK is not bound by the Charter, this ECJ ruling could be influential if the public access elements of this new UK register are challenged on the basis of the same principles under the (overlapping) European Convention on Human Rights which remains applicable in the UK and Jersey.
(*Already owned property on or after 1 January 1999 in England & Wales or 8 December 2014)
This article is for topical interest only and should not be taken as legal advice generally or in relation any specific transaction.
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