Property ownership and public contracting by overseas companies and legal entities: beneficial ownership register
Last updated: 15 May 2017
- Consulting body:
- Department for Business, Energy and Industrial Strategy
- Period of consultation:
- Runs from 5 April 2017 to 15 May 2017
- CML action:
- Response submitted
This call for evidence sets out proposals for a new beneficial ownership register of overseas companies that own UK property or participate in UK government procurement.
It seeks views on the design of the policy and evidence on the possible effects of the policy.
This call for evidence will be of interest to:
- overseas legal entities which own UK property or are considering buying UK property
- overseas legal entities which are considering participating in UK central government procurement
- professional advisers and service providers for overseas legal entities
- estate agents
- conveyancing solicitors
- civil society and transparency campaigners
Given that this beneficial owner register will be the first of its kind, we agree that the government should proceed cautiously, with a view to ensuring the right balance between improving transparency; building in appropriate safeguards around the use of the data; and minimising burdens on legitimate commercial activity.
We would also welcome clarification as to the anticipated number of companies who might be affected by this, given the high amount of resource being dedicated to the creation of a register.
The proposals for overseas entities to provide information about their beneficial owners to a register will have some interactions and impacts for first charge lenders, given that the ‘stick’ for compliance is to restrict the overseas entity’s ability to buy and sell, or otherwise deal with UK property transactions.
Where an overseas entity has not complied with the register, then there is potential for any conveyancing transaction that they are involved in, as either seller or buyer, to be subject to delays, and possible fall-through, with the resulting wasted costs.
We note that the UK government has identified, in the HM Treasury document ‘A better deal’ (published 30 November 2015) that it wishes to address delay, extra cost and fall-through in conveyancing transactions.
We believe that the proposals will, in the main, impact commercial lenders. However, buy-to-let lenders will do some lending to overseas entities, as will private banks.
We would expect this would be a very small proportion of overall lending; however there is no definitive data on this.
Download the full CML response to this consultation below.