Transparency over beneficial ownership of companies, trusts and UK properties

Following the G20 meeting in Brisbane in November 2014, and the subsequent meeting in Turkey in November 2015 where various transparency proposals were agreed, the UK Government has now published an update reiterating its commitment to implement the proposals to increase the transparency of beneficial ownership information.

Some of the commitments are non-tax related, such as money laundering, and the Government has announced that, after consultation with various sectors and policy makers, a national risk assessment of money laundering and terrorist financing has been published.  The Government has also announced that it will ensure the company law and UK money laundering regulations clearly define the criteria for ownership and control that identify a natural person as the ‘beneficial owner’ of a company.

Other commitments relate to the management of beneficial ownership information through central registers, including the registering of trusts with UK tax concerns.

Ownership of companies
The Government’s statement confirms that the UK will require UK-incorporated companies to report beneficial ownership information to a central register. This information will be accessible to domestic authorities without alerting companies and the Government is committed to making this register publicly accessible. The public register is expected to be operational in June 2016. The Government indicates that it will ensure that financial institutions and certain non-financial businesses and professions undertaking customer due diligence will be able to access the information held on this central register. It is not clear what this adds to the commitment to make the register publicly accessible, unless perhaps the Government intends such institutions also to be able to access the information without alerting the companies concerned.

Though not indicated specifically, the Government appears to be referring to the register for companies that has already been introduced through the Small Business, Enterprise and Employment Act 2015, which requires a UK company to maintain a register of people able to exercise significant control over it.

Ownership of trusts
The Government has now also proposed a central register for trusts, which had not previously been announced.

The Government has announced that the UK will require trustees of express trusts to maintain accurate and current beneficial ownership information for their trusts, including the settlors, trustees and beneficiaries. It is also proposed that the UK will hold a central register of the beneficial ownership information of trusts that generate tax consequences in the UK. It is intended for these proposals to be implemented in 2017. It is not yet clear whether these will extend to overseas trusts.

The introduction of the central registers for trusts is a significant development and so far there are no details available on how these registers will be introduced. Moore Stephens will of course provide further updates when information becomes available.

Ownership of UK properties
Another transparency proposal that has been previously announced is a register of UK properties owned by overseas companies. This was discussed in Moore Stephens’ news item in July 2015, here, but there have been no further developments with this proposal. It was not discussed further in the Government’s recent statement other than stating that the Government is committed to consult on extending beneficial ownership transparency to foreign companies investing in high value property or bidding on UK public contracts.

If you would like to discuss the above developments, please contact your usual Moore Stephens adviser.

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