The government proposes to introduce a new register to make public information on the ultimate beneficial owners (UBOs) of overseas companies which own UK properties. The rationale for this register is that it will provide transparency in an area that is believed to have been opaque to date; and that it will prevent fraud and tax evasion taking place through the use of overseas holding structures which mask the true ownership of a property.
The introduction of the government's People with Significant Control (PSC) register on 6 April 2016 has resulted in greater transparency in relation to the ownership of UK companies (at least to the extent that UBOs who are 'PSCs' have complied with their obligations). The proposed new register would extend this approach to property ownership and would apply to overseas companies. It is anticipated that the regime for the new register will apply similar tests to the PSC Regime to determine who should be disclosed as a 'PSC'.
Withers has responded to the government's consultation on the register, noting our concerns about public access to the names and addresses of 'PSCs' of overseas companies owning UK property. In our experience there are a number of legitimate reasons why people choose to own their property through an overseas company and, where the property is their home, they would be justifiably concerned about their home address being made public through the register.
Whilst there is a robust argument in favour of making (some) of the information sought for the new register fully accessible to the UK authorities concerned with tax evasion and other forms of fraud, we are not convinced that this needs to be extended to the general public, or that the public will always have a legitimate interest in finding out this information.
A careful balance needs to be achieved between the desire to make information public in the interests of transparency, and the fundamental right to a private life and safety and security at home. We will therefore be urging that the criteria for deciding whether a person's details should remain private and be excluded from the register should not be set too narrowly and that the criteria be reviewed after a period of time if it is perceived that the protection regime is being abused.For more details on this, please view our briefing note here.