The Built Environment

What does the UK Economic Crime Bill mean for beneficial holders of UK real estate?

Published on 1st Mar 2022

Greater transparency in the UK real estate market is to be welcomed

The UK's Economic Crime (Transparency and Enforcement) Bill published on 28 February 2022 and due to be introduced to Parliament on 1 March 2022 will introduce a new beneficial ownership register for overseas entities holding UK real estate. These proposals went on the back burner in 2018 but have now been accelerated in response to the conflict in Ukraine.

Register's scope

The "register of overseas entities" will be relevant where UK real estate is held by an overseas entity (as opposed to by an individual or by a UK entity).

All non-UK legal entities (that is all entities that have legal personality under the law by which they are governed) will be within the scope of the new register’s requirements though there are likely to be exemptions for entities that already publish their beneficial ownership information. Under the UK's people with significant control (PSC) regime, on which this register is based, the only exemptions are for entities with voting shares listed on certain stock exchanges in the European Economic Area, US, Israel, Japan and Switzerland.

The register will apply to overseas entities who hold freehold titles or leasehold titles of longer than seven years in England – referred to as "qualifying estates". (Slightly different rules will apply in Scotland and Northern Ireland but the broad principle is for it to apply to all freehold and registrable leasehold titles throughout the UK.)

The register will apply to existing holders of UK property as well as new holders.


Overseas entities will need to disclose the name and address of their beneficial owners. They will also need to state the date on which the person became a beneficial owner and the nature of the person's ownership.

The definition of beneficial owner will follow the definition used in the PSC regime, which itself is derived from international anti-money laundering definitions. A beneficial owner is someone who holds directly or indirectly more than 25% of the votes or shares in the overseas entity, has the right directly or indirectly to appoint or remove a majority of the overseas entity's board or has the right to exercise or actually exercises significant influence or control over the overseas entity. There are further rules if interests are held via entities that do not have legal personality (such as trusts or limited partnerships found in fund structures). There will be adaptations for overseas entities which are not similar to UK companies limited by shares.

As a backstop, entities unable to provide their beneficial ownership information will have to provide information on their managing officers instead. This is not a feature of the PSC regime, which sometimes results in no information being disclosed when no beneficial-owner information can be identified. It is being introduced for this register because the government considers it important to ensure that there will always be at least some additional information on the control of overseas entities. 
The government has confirmed that the information will be made public. As with the PSC register, there will be a limited protected disclosure regime which be set out in separate regulations. It is likely that as with the PSC regime, this will only apply if the publication of information would result in a serious risk of violence or intimidation.

Registered overseas entities will have to update their beneficial ownership information at least every 12 months.
Once a registered overseas entity stops being a registered proprietor of land, it can apply to be removed from the register.

The government has reserved the right to make further rules about the verification of information provided to go on, update or be removed from the register. This is likely to dovetail with separate proposals about verification of information registered at Companies House.


The enforcement regime will comprise a system of statutory restrictions on the property title and of putting notes on the relevant land register, backed up by criminal offences.

Specifically, no overseas entity can be registered as the proprietor of a qualifying estate unless it has been registered or is exempt from registration. The government had been considering voiding such transfers completely (so that beneficial title to the property did not pass either) but has concluded that this would not be workable under land law and could have damaging consequences for innocent third parties.

Overseas entities who are already proprietors of a qualifying estate and who acquired that title on or after 1 January 1999 will have a restriction put on their title which will prevent them from dealing with the title unless they are registered or are exempt from registration.

The government had been considering a test for "legitimate lenders" who would be able to repossess and dispose of a property with a restriction against it but has decided that this would be impracticable. The implication is that all lenders will be able to enforce security over restricted property.  The government is also mindful of the impact on insolvency procedures and will be developing its policy to be compatible with them.

Osborne Clarke comment

Given the context, we can expect this legislation to go through the parliamentary procedure fairly quickly.

Investors and developers who hold UK real estate via offshore special purpose vehicles will be well used to sharing ultimate beneficial ownership information as part of anti-money laundering regulation and existing "know your customer" processes. This register should therefore simply be an extra step in the process that we can help guide our clients through.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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