16 May 2023
The continuing march towards transparency – 4 of 6 Insights
Changes being made to the register of overseas entities (ROE) mean overseas entities will have to provide Companies House with additional information. Private trust company structures holding overseas entities will be particularly impacted by these changes, which are being introduced by the Economic Crime and Corporate Transparency Bill (the Bill) currently making its way through Parliament.
Where a trustee of a trust is a registerable beneficial owner of an overseas entity information on the trust and persons connected with the trust must be provided to Companies House. A corporate trustee of a trust that meets the ownership/control conditions in relation to an overseas entity will be a registerable beneficial owner if it provides trust services and the provision of trust services is regulated in the trustee's home jurisdiction. There may, in some cases, be more than one trustee in an ownership structure – for example, where an overseas entity is held in a trust with a PTC as trustee and the shares in the PTC are held in a purpose trust with a third party corporate trustee.
Currently, if there is more than one trustee in an ownership structure only the first trustee in the chain will be a registerable beneficial owner for the purposes of the ROE; this means that (subject to certain limited exceptions) only details of that trustee and the trust of which it is trustee need to be provided to Companies House.
So, in the PTC example, no details of the third party corporate trustee or any person connected to the purpose trust currently need to be provided to Companies House, other than any controlling persons of the purpose trust (e.g. protectors and enforcers). This will change if the Bill is enacted in its current form – the Bill provides that all trustees in the ownership chain will be registerable beneficial owners meaning that information on all trusts in the chain will also need to be provided to Companies House. So, going back to the PTC example, details of the third party corporate trustee and the purpose trust (including details of the settlor, beneficiaries and the enforcer(s) of the purpose trust) would need to be provided as well as details of the PTC and the trust of which it is trustee. These proposed changes will significantly expand the scope of the provisions requiring trust information to be provided to Companies House.
Details of the registered title number of all UK land interests held by an overseas entity will need to be provided to Companies House under measures included in the Bill. This information will not, however, be made available to the public. To date, title numbers have only had to be provided to Companies House where an overseas entity disposed of a relevant interest in UK land on or after 28 February 2022 but before 1 February 2023.
An overseas entity that holds interests in more than one title number and disposes of one of those interests will need to remember to apply for information relating to the title numbers that it no longer holds to be removed from the register.
If you have any questions on the Register of Overseas Entities and how the rules affect you, please get in touch.
This article forms part of a series on transparency issues, including articles covering:
24 April 2023
26 April 2023
10 May 2023
16 May 2023
4 July 2023
5 September 2023
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