Beneficial Ownership Act 2017
The Isle of Man Government has introduced the Beneficial Ownership Act that became effective from 21 June 2017. Beneficial owners (see definition below) who have an interest in an Isle of Man company, partnership or foundation will be affected. Owners and administrators such as Corporate Service Providers (“CSP”) must comply with the new legislation. Failure to do so is an offence.
Background to the legislation
The Beneficial Ownership Act was given Royal Assent in April 2017 and the central database went live on 1 July 2017. The legislation was developed in line with the Isle of Man Government’s commitment, made to the United Kingdom last year, to enhance agreements for the sharing of information about the beneficial ownership of corporate and legal entities.
What is beneficial ownership?
In the Act, ‘beneficial owner’ means the natural person who ultimately owns or controls a legal entity to which the Act applies, in whole or in part, through direct or indirect ownership or control of shares or voting rights or other ownership interest in that entity, or who exercises control via other means, whether or not this is the name recorded in the legal entity’s share register.
The Act defines any beneficial owner who owns or controls more than 25% of the beneficial ownership of a legal entity to which this Act applies as a “Registrable Beneficial Owner”.
The Nominated Officer
Every organisation must appoint a Nominated Officer unless the legal entity is in receipt of regulated CSP services. The Nominated Officer must be either a natural person who is resident in the Isle of Man or a licensed CSP.
The Nominated Officer must maintain appropriate records to accurately record and report beneficial ownership information (and changes thereto) to the appropriate Department that holds the Isle of Man Database of Beneficial Ownership.
There are statutory obligations on the beneficial owners and intermediate owners to assist the legal owner to provide beneficial ownership information to the Nominated Officer. Failure to meet these obligations is an offence under the Act.
Who can access the information?
The information will not be made public at any time.
Certain departments and statutory bodies within the Isle of Man Government such as Regulatory, Policing and Taxation Authorities may access the database for a permitted purpose.
It is understood that the Isle of Man Government will also make the database accessible to some UK Government agencies as appropriate, but the exact information regarding those who will be able to access the data, and how, has not yet been made public.
Who will be reported and what information will be held?
In respect of each Registrable Beneficial Owner, the Nominated Officer must submit the required details to be held in the Isle of Man Database of Beneficial Ownership.
In respect of such individuals, the following information will need to be recorded. These are defined in the legislation as the “required details”:
- Usual residential address
- A service address (if this differs from the usual residential address)
- Date of birth
- The date on which the interest in the legal entity was acquired
- The nature and extent of the interest (expressed as a percentage)
If there are no Registrable Beneficial Owners for the legal entity, the Nominated Officer is required to confirm at least once a year (on the annual return date) to confirm that the information held is both current and correct. A statement of compliance will also be required.
How will the information be provided?
The information must be submitted online, directly to the Isle of Man Database of Beneficial Ownership, by the Nominated Officer or CSP.
When does the information have to be submitted?
The Nominated Officer must submit the registrable beneficial ownership information by the date on which the legal entity’s next annual return must be filed or by 30 June 2018, whichever is earlier, but in any event as soon as reasonably practicable after the information has been submitted to the Nominated Officer. Any changes to the information must then be submitted to the database within one calendar month of the Nominated Officer being made aware of the said changes.
More detailed information can be found on the Isle of man Government’s website. Click here to view.
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