Register of overseas entities – important changes in access to private trust information

On 22 April, a draft statutory instrument was laid before the UK Parliament which, once signed into law, will have a significant impact on the privacy of information relating to certain trusts involved in the ownership of UK real estate.

The UK's register of overseas entities ('ROE') has existed for several years now.  It was introduced soon after the 2022 Russian invasion of Ukraine to increase transparency around the ownership of UK real estate through non-UK entities. Most non-UK entities which own UK real estate must register on the ROE and in doing so disclose their registrable beneficial owners. Those beneficial owners are then placed on a register held at Companies House, available to inspection by any member of the public.

The rules we use to determine the registrable beneficial owners of an entity are modelled on the 'persons with significant control' rules for UK companies.  Those rules, as the name suggests, are crafted principally to identify the individuals or entities who exercise control over a company, rather than its economic owners per se (albeit the two often overlap). They were, therefore, perhaps not the best starting point for a set of rules to identify beneficial owners of entities – and there have been several rounds of adjustments to the ROE legislation since the register was launched to address this.

Trusts have posed a particular challenge to the parliamentary drafting team.  Immediately prior to the introduction of the register, provisions relating to trusts were bolted unsatisfactorily on to the draft legislation. Under these trust rules, if a trustee was the registrable beneficial owner of the entity, information about the trust, including the identity of the settlor and beneficiaries along with certain biographical information, had to be disclosed to the registrar at registration (and updated at various points thereafter). This trust information was meant to remain private and be accessible to UK government bodies only.

Later, gaps in the rules were identified requiring further changes to the legislation to ensure that trusts all the way up complex ownership structures were captured.

Then, from 31 August 2025, barely three years into the life of the ROE, the principle of privacy for trust information was abandoned altogether. From that date, third parties could apply to the registrar to obtain information about any trust associated with a registered overseas entity. In order to obtain the information, the applicant needed to have the name of the overseas entity and that of the trust associated with it.

The draft statutory instrument laid before Parliament last Wednesday goes one very large step further. Once in force, the requirement that an applicant seeking trust information know the name of the relevant trust will be dropped. From that point, any person will be able to make an application for trust information effectively on the basis of the name of an overseas entity alone. As all registered overseas entities sit on a public-facing register, there will be an obvious opportunity for fishing expeditions.   

Applicants who seek information about multiple entities in a single application will still need to show the registrar that they have a 'legitimate interest' in the information. This requires them to demonstrate, for example, that the trust information is required for the purpose of furthering an investigation into money laundering (among other things). This might appear to pose some barrier to fishing expeditions through batch applications, but we already know (by experience) that it is possible for an individual applicant to make multiple applications in respect of different entities in one day without needing to show a legitimate interest, meaning this requirement becomes somewhat redundant.

Protections do exist for information relating to under-18s (which should not be disclosed by the registrar). It is also possible for an individual to make an application to protect their information in circumstances where its disclosure would put them at serious risk of being subjected to violence or intimidation. This is, clearly, a high bar to clear and will only be appropriate in limited circumstances.

The significant change to the trust information disclosure mechanism contained in the draft statutory instrument will substantially change the privacy position of owning UK real estate through an overseas entity held in trust. That arrangement will become materially worse from a privacy perspective than many other ownership structures. A trust holding real estate directly, for instance, would not be subject to this degree of public disclosure, nor would one holding real estate through a UK company.

There is, generally, only one direction of travel when it comes to the curtailing of privacy in favour of transparency.  We do sometimes see reversals.  In the United States, for example, the Corporate Transparency Act's requirements concerning disclosure of beneficial owners of domestic companies were significantly pared back by the incumbent administration.  In the European Union, a pivotal 2022 case found that unrestricted access to data held in registers of beneficial ownership was a breach of fundamental rights, and legislation was struck down accordingly.  In the UK, however, there is no constitutional mechanism which would allow a court to actually overturn primary legislation on the basis of human rights (the explanatory notes to the draft statutory instrument state that the relevant government official considers the proposed change to the law to be compatible with the European Convention on Human Rights).

Once implemented, this most recent addition to the ROE rules will likely be here to stay. The ROE imposes important ongoing reporting requirements which themselves carry a degree of cost. Investors in UK real estate should take advice on the scope and effect of the rules in their circumstances, and the mechanisms which UK law does still provide for protecting privacy in an appropriate way.

If you own or manage an overseas entity which holds or may come to hold UK real estate and would like advice on the impact of the ROE rules on your entity, please get in touch.