The UK Autumn Budget, presented on 26 November 2025, introduced a number of measures that will have an impact on UK and international private clients with interests offshore. It followed the wholesale dismantling of the longstanding non-domiciled and the ‘protected trust’ tax regimes from the UK tax system last April.

As of 6 April 2025, the UK government replaced ‘domicile’ as a connecting factor for liability to applicable UK taxes, including inheritance tax (IHT), and adopting a residence-based regime instead. Individuals who have been UK resident for at least 10 out of the past 20 tax years are classified as a ‘Long-Term Resident’ (LTR) and exposed to IHT on their worldwide assets.

To ensure that LTRs do not escape tax obligations immediately upon leaving the UK, the legislation includes a ‘tail’ provision. This means that, if the LTR dies within the residence tail period, their worldwide estate will still be subject to UK IHT for up to 10 years after they cease to be a UK resident.

The length of the tail will depend on the duration of the individual’s residence in the UK. The minimum length of the tail is three years, which applies to individuals who have been UK resident for 10 to 13 of the past 20 UK tax years. The length of the tail increases by one tax year for each additional year of residence, up to a maximum of 10 years.

Individuals who do not meet the criteria for LTR status generally remain liable for IHT on UK-based assets only. This aligns with the previous system, under which non-UK domiciled individuals were taxed on UK situs assets but non-UK assets were out of scope for IHT purposes.

A new Foreign Income and Gains (FIG) regime was also introduced for people moving to the UK for the first time or after living abroad for at least 10 years. Foreign income and gains are tax-free for the first four years in the UK but are then subject to standard UK tax rules.

Under the old rules, trusts set up by non-doms were free from UK IHT forever. This shelter was removed. Once the settlor is classified as an LTR, the trust falls within the UK’s ‘10-year charging regime’, which imposes a tax charge of up to 6% every 10 years or when assets leave the trust – even if the settlor is excluded as a beneficiary of the trust.

The recent Autumn Budget announced a cap for these charges: for certain trusts created before 30 October 2024, all charges for each 10-year period – including the 10-year charge and any exit charges – will be limited to £5 million. Unfortunately, the £5 million cap applies only per trust, so multiple smaller trusts settled by one settlor will not get relief.

The Budget also introduced, with immediate effect, a measure to prevent the possibility of avoiding the exit charge on non-UK assets held in trust when a settlor ceases to be an LTR by converting non-UK relevant trust property into UK-situs assets immediately prior to the exit.

From 6 April 2026, it will also no longer be possible for an individual who is not an LTR to shelter UK agricultural property from IHT by holding it via a non-UK entity. It will now be subject to the same IHT treatment that was introduced for residential property under the IHT anti-enveloping legislation in 2017. UK commercial property can still be sheltered by non-LTRs using an offshore structure.

As we have previously highlighted, the main beneficiaries of all these changes to the UK’s IHT regime, are long-term UK expatriates. Before 6 April 2025, the worldwide estates of individuals with a UK domicile of origin remained subject to IHT unless they had succeeded in shedding their domicile of origin and acquiring a new domicile of choice in a distinct jurisdiction.

This involved moving to a country and forming a permanent or indefinite intention to remain there, which created difficulties for globally mobile individuals who did not settle in any one location. It was not possible to obtain a domicile ruling from HMRC, so the IHT position of many British ex-pats was uncertain.

With the UK’s new statutory residence test in place, British ex-pats have certainty as to their residence status. If they have at least 10 tax years of non-UK residence, they can set up an overseas excluded property trust (offshore trust) without any risk of an upfront IHT charge. This may be advantageous for asset protection or succession planning, as well as managing assets for future generations.

Furthermore, subject to the tax regime in their country of residence, gains and income accumulated within the trust may not be exposed to personal taxation. Many countries, even EU states such as Italy, Greece, Cyprus and Malta, have non-domicile tax regimes that only impose tax on income and gains that are either sourced locally or are remitted to the country of residence. Income and gains that remained within an offshore trust would not therefore be subject to taxation.

Consideration will only need to be given to the IHT treatment of the trust if the expat returns to live in the UK. Previously, an individual with a UK domicile of origin in the UK who then became UK resident was immediately treated as domiciled in the UK, and taxable on their worldwide income or gains. Now their foreign assets will not be in scope of IHT until such time as they become classified as an LTR, and they can also benefit from the new FIG regime for four years.

British expats living abroad can take advantage of this favourable new regime to return to the UK for a short period, for business reasons, to care for elderly parents or to cease being resident in another jurisdiction for foreign tax planning reasons. And, because they can clearly identify their first year of UK residence, they can take the steps necessary to cease UK residence again, if and when desired.

Please contact Simon Denton sdenton@sovereigngroup.com or David Griffiths dgriffiths@sovereigngroup.com at Sovereign UK for further information or to arrange a non-obligatory call or virtual meeting to examine your circumstances and requirements.

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The UK Companies House and Insolvency Service announced that it had shut down three connected companies providing unregulated company secretary and registration services to more than 11,000 UK businesses for overseas clients, predominantly from China, that had no real presence in the UK.

Yunma Tianlong International Consulting Co. Limited, Busy Secretary Service Limited and J&C Business (UK) Co. Limited were all wound-up at the High Court in London on 29 January. None of the companies were registered with HM Revenue and Customs (HMRC) as trust and company service providers (TCSPs).

They were operating an unregulated business model because they had failed to register as TCSPs, did not conduct anti-money laundering due diligence on clients wishing to register UK companies, and were creating a false impression that their clients had a genuine UK business presence. Investigators found that, as of April 2024, one address in South Croydon had more than 8,500 companies registered to it, but the uncollected post had piled up inside reaching the letterbox.

The three companies also filed dormant accounts at Companies House despite conflicting information that suggesting active trading which could not be verified. They also did not appear to follow UK data protection rules and did not fully co-operate with Insolvency Service investigations.

Registered TCSPs, like Sovereign, are firms that offer services such as forming companies, acting as directors, secretaries or trustees, and providing registered office addresses. They must be registered with HMRC and follow strict anti-money laundering rules.

“Most third-party agents provide legitimate services and play an active role in the creation and management of UK companies,” said Martin Swain, Companies House Director of Intelligence and Law Enforcement Engagement.

“We know however that some agents fail to comply with the rules and are careless, even reckless, in carrying out their duties. We will continue to step up our efforts with our law enforcement partners to crack down on this type of activity and protect the integrity of the register.”

Sovereign Corporate & Trustee Services Limited (SCATS), based in Chester, is supervised as a TCSP by HMRC for Anti-Money Laundering (AML). It specialises in helping UK businesses and individuals comply with Companies House and HMRC regulations, including identity verification, Trust Registration Service data and Register of Overseas Entities (ROE) requirements.

Businesses supervised by HMRC are subject either to fit and proper or approval requirements to ensure that the businesses’ beneficial owners, officers and managers are appropriate people to undertake those roles. Relevant persons must also pass the appropriate test before the business can register, and remain registered, with HMRC.

If you are looking to set up a genuine business presence in the UK, it is essential to use a properly registered and supervised TCSP. More than just a badge of approval, our registered TCSP status formalises our ability to support clients, particularly those overseas, with the evolving demands of UK corporate compliance.

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Companies House has issued updated draft guidance to assist businesses to identify who really holds ‘significant influence or control’ in a company for the purposes of the Register of People with Significant Control.

What is a Person with Significant Control?

A Person with Significant Control (PSC), sometimes called a ‘beneficial owner’, is someone who owns or controls a company. All England & Wales Companies are required to identify their PSCs and inform Companies House who they are and which of these conditions they meet. If a company cannot identify its PSC(s), or does not have any, it must also inform Companies House.

A company can have one or more PSCs. A PSC must meet one or more conditions known as the ‘nature of control’, which typically includes an individual or legal entity that:

1. Holds more than 25% shares in a company.
2. Holds more than 25% voting rights in a company.
3. Has the right to appoint or remove a majority of directors.
4. Has the right to exercise “significant influence or control” over the company.
5. Has the right to exercise significant influence or control over the activities of a trust or a firm that meets any of the other specified conditions in relation to the company.

The new draft guidance is intended to clarify the terminology and to provide examples of what might constitute ‘a right to exercise’ significant influence or control – as per conditions 4 and 5 above – or what might not.

Rights that may indicate Significant Influence or Control

The right to exercise significant influence or control is a right which, if exercised, would give rise to the actual exercise of significant influence or control. In the context of a company, a person may hold a right to exercise significant influence or control due to a variety of circumstances, including:

• The provisions of a company’s constitution.
• The rights attached to the shares or securities that a person holds.
• A shareholders’ agreement, some other agreement or otherwise.

Such rights may result in that person being a PSC in relation to the company, regardless of whether they exercise that right.

Condition 4

a. Right to exercise significant influence or control – Company

According to the guidance, the term ‘absolute’ is used in relation to decision rights or a veto to mean that a person can make or veto a decision without reference to or collaboration with anyone else.

1. 1. 1. Absolute Decision Rights
         • Where a person has absolute decision rights over decisions related to the running of the business of the company, such as:
           • Adopting or amending the company’s business plan.
           • Changing the nature of the company’s business.
           • Additional borrowing from lenders.
           • Appointment or removal of chief executive officer (CEO).
           • Setting or altering profit-sharing, bonus or other incentive schemes for directors or employees.
           • Granting options under a share option or other share-based incentive scheme
      2. Absolute Veto Rights
         • Where a person has absolute veto rights over decisions related to the running of the business of the company, such as:
           • Adopting or amending the company’s business plan.
           • Additional borrowing from lenders.

         The guidance states that where absolute veto rights are held for the purposes of protecting minority interests in the company, they are unlikely, on their own, to constitute ‘significant influence or control’ over the company.

         • Where a person holds absolute veto rights over the appointment of the majority of directors, meaning those directors who hold a majority of the voting rights on all or substantially all matters.

b. Actually exercises significant influence or control – Company

According to the guidance, all relationships that a person has with the company or other individuals who have responsibility for managing the company should be taken into account to identify whether the cumulative effect means that they do actually exercise significant influence or control.

For example, a director who also owns important assets (such as intellectual property rights) or has vital relationships that are important to the running of the business and who uses this additional power to influence the outcome of decisions related to the running of the business of the company.

A person would exercise “significant influence or control” if:

• They are significantly involved in the management and direction of the company, such as a non-board member who regularly or consistently directs or influences a significant section of the board, or a person who is regularly consulted on board decisions and whose views influence decisions made by the board. This would include a person who falls within the definition of ‘shadow director’ under section 251 of the Companies Act 2006.
• Their recommendations are always or almost always followed by shareholders who hold the majority of the voting rights in the company, when they are deciding how to vote, such as a company founder who no longer has a significant shareholding in the company.

Condition 5

a. Right to exercise significant influence or control – Trust or Firm

This applies if a person has the right to exercise significant influence or control over the activities of a trust or firm (partnership) that also meets any of the conditions (above) for being a PSC of a company. This would apply regardless of whether the person actually exercises that right.

A person has the right to exercise ‘significant influence or control’ over a trust or firm if that person has the right to direct or influence the running of the activities of the trust or firm, such as the right to:

• Appoint or remove any of the trustees or partners, except through application to the courts or following a breach of fiduciary duty by the trustees.
• Direct the distribution of funds or assets.
• Direct investment decisions of the trust or firm.
• Amend the trust or partnership deed.
• Revoke the trust or terminate the partnership.

b. Actually exercises significant influence or control – Trust or Firm

• A person is likely to exercise significant influence or control over a trust or firm if they are regularly involved in the running of the trust or firm. For example, a person who issues instructions to the trustees or members of the firm that are generally followed. This may be a settlor or beneficiary who is actively involved in directing the activities of the trust.
• A person who controls the management or activities of a limited partnership would be considered a person with significant influence or control over the firm.

Excepted roles with respect to Companies and Trusts or Firms

The guidance provides a non-exhaustive list of roles and relationships that would not, on their own, result in that person being considered to be exercising significant influence or control for the purposes of the fourth or fifth conditions, including:

• Professional lawyers, accountants or advisers
• Lenders or commercial counterparties
• Regulators, liquidators, or employees acting in the course of their employment.
• Directors acting only within the normal scope of their role.

However, if the role of such a person differs significantly from the norm or forms part of a wider pattern of influence, they may still be regarded as a PSC.

Next steps

The draft Companies House Guidance aims to:

• Make PSC identification clearer.
• Reduce ambiguity around significant “influence” and “control”.
• Give companies a practical set of examples to follow.

It reinforces that PSC status isn’t just about shareholdings – power and influence are equally significant.
This Guidance is still in draft and awaits parliamentary approval. If parliament raises no objections within 40 days, the guidance will be formally issued. Until then, the old guidance remains in force.

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The 2025 UK Budget had less of an impact on private client planning than feared.

This Webinar provided an update on private client tax planning for UK tax residents following last week’s Budget and the draft Finance Bill 2026 (to be released before the Webinar).

The topics covered were:

1. Overview of UK Property Planning (following announcement of increase in IT rates on property income from April 2027).
2. Family Investment Companies (considering impact of higher tax rates on dividend income from April 2026).
3. Excluded Property Trusts (EPTs); identify which existing EPTs will benefit from the relief announced in the Budget. New EPTs: eligibility, structure and benefits.
4. Overseas life insurance bonds. These were not impacted by the Budget and will continue to provide an income tax and capital gains tax deferral mechanism for all UK residents.
5. Q&A

Speakers

Simon Denton Managing Director | Sovereign (UK) Limited

Laurence Lancaster LLB, LLM, TEP | Barrister-at-law | Group Head of Tax

Click below to view the webinar

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Unlocking the Isle of Man Advantage: A strategic jurisdiction for individuals, families and corporates 

Date: Tuesday 2^nd December

Time: 9am London | 1pm Dubai | 5pm Hong Kong

Join us for a live webinar to discover how working with Sovereign in the Isle of Man can offer compelling benefits for individuals and businesses

Watch a recording of the webinar below.

Corporate establishment: Evaluating when and why the Isle of Man is an ideal location for corporate structures, including 0% Corporation Tax and competitive service costs

Maximise VAT registration: Learn how Isle of Man corporate VAT registration can benefit businesses engaged in cross-border and international trade

Trusts for asset protection: Revealing the advantages of Isle of Man trusts for asset and wealth protection, succession planning, and inheritance tax mitigation

Property investment structures: How to use Isle of Man companies and trusts structured for UK property investment — both commercial and residential

A safe, regulated and reliable jurisdiction: Gain confidence in the Isle of Man’s reputation as a leading blue chip international financial centre

Comprehensive support: How Sovereign Trust Isle of Man Limited can support clients globally

This webinar is free to attend, please click below to register.

Speakers

Simon Denton

Managing Director | Sovereign (UK) Limited

Sharon Lannigan TEP

Director Business Development and Marketing | Sovereign Trust (IOM) Limited

The post Live Webinar – Unlocking the Isle of Man Advantage: A strategic jurisdiction for individuals, families and corporates appeared first on The Sovereign Group.

The UK National Crime Agency reported, on 16 July, that 11,500 UK companies had been struck off Companies House register over the last year for failure to comply with the Registered Office requirements under the Companies Act 2006.

The project, coordinated by the National Economic Crime Centre, was designed to identify and enable enforcement action against high-risk company incorporation locations and corporate entities believed to be enabling criminality in the UK and overseas.

It involved the National Crime Agency, Companies House, HM Revenue & Customs, the Insolvency Service, the Financial Conduct Authority, the Office for Professional Body Anti-Money Laundering Supervision, the Home Office and the UK police.

As part of the project, police visited 11 addresses where 30 high risk trust and company service providers operated. They identified that no real business activity was taking place and that company formation agents had failed to comply with relevant requirements under the Companies Act.

As a result, key individuals involved in company formation have been barred from making further registrations, criminal referrals have been made to the Insolvency Service, three high risk trust and company service providers are to be closed, with a further 27 facing enforcement action, and significant criminal property has been identified for law enforcement civil recovery action.

The activity forms a part of wider cross-government efforts to prevent the abuse of UK corporations by criminals. Landmark reforms under the Economic Crime and Corporate Transparency Act are coming into force at Companies House, including the new Authorised Corporate Service Provider regime and forthcoming ID Verification requirements.

“We recognise that many third-party agents provide legitimate services and play an active role in the creation and management of UK companies. However, we also know that some agents are complicit in various forms of criminality by wilfully abusing and exploiting the system,” said Companies House Director of Intelligence and Law Enforcement Engagement Martin Swain.

“I am pleased that Companies House is playing a much greater role in helping to disrupt this type of activity and reduce economic crime – as our role here shows. We will continue to support our law enforcement and regulatory partners in identifying, targeting and stopping abuse of the company register.”

The post UK Companies House strikes non-compliant UK companies off register appeared first on The Sovereign Group.

UK Companies House has confirmed that the legal requirements for directors and people with significant control (PSCs) of companies to verify their identities will begin on 18 November.

This new requirement was brought in under the UK’s Economic Crime and Corporate Transparency Act (ECCTA), which introduced the biggest changes to Companies House since corporate registrations were first established in 1844.

Identity verification is to be phased in over a 12-month transition period, as follows:

• New directors will need to verify their identity to incorporate a company or be appointed to an existing company.
• Existing directors will need to confirm they have verified their identity at the same time as they file their next annual confirmation statement during the 12-month transition period.
• Existing PSCs will need to verify their identity in line with an appointed day within 12 months of the commencement of mandatory identity verification on 18 November.

Companies House has estimated that that over six million individuals will need to verify their identity by mid-November 2026 and is therefore encouraging individuals to verify their identities as early as possible. From 18 November, directors and PSCs will be able to check the Companies House register to see identity verification due dates for all their roles.

Individuals can verify their identity either directly with Companies House or through an Authorised Corporate Service Provider (ACSP). An ACSP, also known as a Companies House ‘authorised agent’, is a business that is covered by Money Laundering Regulations in the UK. This includes professional service providers such as accountants and solicitors, as well as Trust and Company Service Providers (TCSPs) such as Sovereign Corporate & Trustee Services Ltd (SCATS).

Chester-based SCATS was officially registered as an ACSP with Companies House in March this year, enabling it to carry out identity verification (IDV) checks for company directors and PSCs. To register as an ACSP, applicants must be supervised within the UK by an Anti-Money Laundering (AML) supervisory body. When registration has been completed, ACSPs receive a digital account and a unique identity number.

Also from 18 November, all companies will need to provide Companies House with a registered email address to enable it to communicate any important changes to company law or requirements for a company’s compliance. If you use the email address of a third-party agent, such as SCATS, as your registered email address, they must forward you all your company’s emails.

From Spring 2026, third-party providers will further be required to be registered as an ACSP to make any filings to Companies House on behalf of their clients.

For international directors or clients unfamiliar with the UK system, Sovereign’s ACSP status offers a straightforward route to staying compliant with the evolving demands of UK corporate compliance. For any business with UK-linked structures, especially those involving non-resident directors or shareholders, it is critical to understand and navigate these changes.

SCATS is also a Companies House Assured Agent. This means we are positioned to assist with the Register of Overseas Entities (ROE), which was introduced to identify the beneficial owners of overseas entities (OEs) that own property or land in the UK. We can therefore assist with everything from initial ROE registration and IDV, to filing update statements and verifying structural changes.

The post UK Companies House confirms Identity Verification rollout from 18 November appeared first on The Sovereign Group.

The Isle of Man and UK governments issued a joint statement on 27 May following their agreement to explore ways to crack down on promotors of tax avoidance schemes.

The UK and the Isle of Man were amongst the early adopters of the OECD Common Reporting Standard, which facilitates the automatic exchange of financial account information between jurisdictions, and both are working on the Crypto-Asset Reporting Framework which will see the automatic exchange of information on crypto-assets.

Both jurisdictions have also recently implemented measures in relation to the Global Base Erosion Rules under the OECD’s Pillar 2 Global Minimum Tax.

“Both governments are committed to taking robust action to deter and disrupt the activities of those who seek to promote marketed tax avoidance schemes that threaten our tax systems and the reputations of our well-established and globally attractive service sectors,” said the joint statement.

“Recognising the need to go further and noting the UK government’s ongoing consultation on steps to crack down on promoters of marketed tax avoidance schemes, we are pleased that we have been able to agree today to explore ways to further enhance information flows, joint working, and other ways in which tangible benefits for both jurisdictions can be achieved.

“We look forward to continuing our partnership and achieving tangible results in our shared objective of combatting tax avoidance and evasion,” it concluded.

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The UK government issued the Protection and Disclosure of Personal Information (Amendment) Regulations 2025 on 15 May to further extend the range of circumstances in which individuals can apply to the Registrar of Companies to protect their personal information where it appears on the public register were published in draft.

The draft regulations expand the existing protection regime by providing that provide that individuals can apply for the day of their date of birth, their signature and, in the case of directors of companies, their business occupation to be protected from public inspection.

They also amend the Companies (Disclosure of Address) Regulations 2009 to widen the protection of usual residential address regime to allow any individual to apply to have their usual residential address made unavailable for public inspection.

When fully in force, an individual will therefore have the right, subject to certain exceptions, to apply for their usual residential address, signature, day of date of birth and business occupation to be protected, without needing to justify the application or meet qualifying criteria.

It is intended that the regulations will come into force on 21 July 2025. If they are not made before 21 July 2025, they will come into force the day after they are made.

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UK Companies House is rolling out new identity verification (IDV) requirements for directors, people with significant control (PSCs) and persons filing documents on behalf of companies over the coming months.

From 18 March third-party providers have been able to register as Authorised Corporate Service Providers (ACSPs) and from 8 April individuals have been able to verify their ID with Companies House on a voluntary basis.

Compulsory ID verification for new directors and PSCs is due to be introduced in Autumn 2025. At this point a 12-month transition period will open during which existing directors and PSCs will be obligated to verify their identities when an existing company files its annual confirmation statement.

Under the new requirements, the following parties will be required to have their ID verified with Companies House:

• All company directors and equivalents of directors, which include members, general partners and managing officers.
• All Persons of Significant Control (PSCs) and, where a Relevant Legal Entity (RLE) qualifies as a PSC of a company, the identity of a relevant officer of the RLE.
• All Limited Liability Partnership (LLP) members.
• All parties who file documents at Companies House on behalf of a company.
• ACSPs.

An individual’s identity can be verified either directly with Companies House or indirectly by the delivery of a verification statement to Companies House by an Authorised Corporate Service Provider (ACSP).

By Spring 2026, any individual filing a document at Companies House on behalf of a company, such as a company secretary, corporate service provider, accountant or lawyer, will also need to have had their identity verified unless they are an employee or officer of an ACSP.

Persons with Significant Control (PSCs)

A PSC is an individual who is regarded as owning or controlling a company, sometimes known as a ‘beneficial owner’, because they meet one of the following four conditions by holding:

• More than 25% of shares in the company.
• More than 25% of voting rights in the company.
• The right to appoint or remove the majority of the board of directors.
• The right to exercise, or actually exercises, significant influence or control over a company.

Where a trust or company would satisfy one of these four conditions if it were an individual, any individual holding the right to exercise, or actually exercising, significant influence or control over the activities of that trust or company is a PSC.

Since 2016, most companies and LLPs have been required to hold a register of PSCs and file the information on their register with Companies House.

Direct ID Verification with Companies House

Companies House provides three options for direct verification with the Registrar:

• Option 1 – Verify online using the GOV.UK One Login ID Check app to conduct a facial recognition scan against one of the following types of photo ID:
  • Biometric passport from any country.
  • UK photo driving licence (full or provisional).
  • UK biometric residence permit (BRP).
  • UK biometric residence card (BRC).
  • UK Frontier Worker permit (FWP).</li
• Option 2 – Verify online using the GOV.UK One Login web service by using bank or building society details, National Insurance number, and answering various security questions. Details will also be required from either a UK passport or a UK photocard driving licence.
• Option 3 – Verify in person at the Post Office. The individual will first need to enter details from their photo ID on GOV.UK and then go to a Post Office that offers ‘in branch verification’ services where the photo ID will be scanned and the individual will be photographed.

To sign in to or create a GOV.UK One Login, individuals will also need to provide a suitable email address that has not previously been used for the purpose and a current home address and previous addresses if resident for less than 12 months.

Once an individual’s identity has been verified, they will receive a unique identifier known as a Companies House personal code, which is personal to the individual and should be retained for all Companies House purposes.

Indirect ID Verification with Companies House

An alternative way of verifying an individual’s identity is the delivery of a verification statement to Companies House by an ACSP confirming that the individual’s identity has been verified. This route may be appropriate where an individual is unable to comply with any of the three options for verifying directly with Companies House.

Once an ACSP has verified an individual’s identity to Companies House, the individual will then be issued with a Companies House personal code.

Non-compliance

Compliance with IDV is becoming a mandatory legal requirement. Failure to comply could result in:

• Companies House not accepting filings, including incorporation or changes to the register.
• Financial penalties for companies and individuals.
• Directors being disqualified from holding office.

Sovereign Corporate & Trustee Services (SCATS)

Chester-based Sovereign Corporate & Trustee Services (SCATS) is registered as an ACSP, which authorises us to carry out identity verification (IDV) on behalf of clients and to file required documentation directly with Companies House.

For international directors or clients unfamiliar with the UK system, this offers a straightforward route to staying compliant with the evolving demands of UK corporate compliance. For any business with UK-linked structures, especially those involving non-resident directors or shareholders, understanding and navigating these changes is critical.

SCATS is also a Companies House Assured Agent, which means we are also positioned to assist with the Register of Overseas Entities (ROE), which was introduced to identify the beneficial owners of overseas entities (OEs) that own property or land in the UK. We can assist with everything from initial ROE registration and IDV, to filing update statements and verifying structural changes.

The post UK Companies House introduces new identification verification service appeared first on The Sovereign Group.

UK Companies House issued a report on 30 June setting out its progress in implementing changes introduced under the Economic Crime and Corporate Transparency Act (ECCTA) 2023, which were designed to transform the agency from a passive register into an active gatekeeper to combat economic crime and improve the quality of register data.

Companies House said that, using its new powers to query and remove false, misleading or incorrect information from the registers, it had challenged 100,400 companies between 4 March 2024 and 3 March 2025 in respect of:

• 82,600 registered office addresses.
• 66,900 officer addresses.
• 55,100 People with Significant Control (PSC) addresses.
• 49,800 incorporation documents.
• 11,200 additional documents from the register.

It had also worked with data partners, to identify companies with potentially deceased individuals on their records, which could be a result of companies failing to keep their records up to date but could also signal a more serious attempt to mislead.

To better understand which measures prove effective in detecting and preventing misuse of the register, Companies House said it had trialled various interventions. This had led to the rejection of 10,200 suspicious applications, including where evidence had suggested addresses were inappropriate.

It has also started pilot work to use the new financial penalties regime to drive compliance, focusing initially on the most serious late filers of the annual confirmation statement. Companies House said it had issued 419 penalty warning notices and 192 penalty notices, of which 48 entities had complied and 12 penalties had been paid. A further 33 companies had opted for voluntary dissolution, while 78 had changed their addresses to the default address prior to being struck off.

Companies House said the capability and capacity of its Intelligence Hub had continued to grow over the period, with increased use of the new data sharing powers to make about 600 intelligence referrals to relevant intelligence to key partners, including the National Crime Agency, HMRC, the Insolvency Service and policing in the UK.

In respect of the Register of Overseas Entities (ROE), which was introduced under the Economic Crime (Transparency & Enforcement) Act 2022 (ECTEA) to increase transparency and identify the beneficial owners of overseas entities (OEs) that own property or land in the UK, Companies House said 30,400 entities had registered as of 4 March and it had been searched more than 2.8 million times.

Companies House said it continued to scrutinise information on the register, working in partnership with the UK Land Registries and other agencies to identify those that have failed to comply with their obligations. OEs that had not registered with Companies House, or had failed to comply with the updating duty, now face restrictions on selling, transferring, leasing or raising charges against their property or land. OEs also cannot buy any new UK property or land without an Overseas Entity ID.

To increase transparency on the ROE, Companies House implemented a digital removal service in April 2024 allowing OEs to apply for deregistration if they had disposed of all their UK property. Since launching the removal service, 1,500 entities had been removed.

Companies House is currently implementing Section.174 of the ECCTA, which will require OEs to provide details in their next annual update statement on individuals that had previously been beneficial owners and had ceased their involvement after the ECTEA was announced but before the OE registered on the ROE. This, it said, will disclose details on beneficial owners in circumstances where OEs used the period before registration to change their ownership structure.

The Insolvency Service’s close collaboration with Companies House had also delivered positive results in the fight against economic crime, with joint efforts identifying thousands of suspicious companies and millions in criminal assets, including:

• Interventions by law enforcement partners at 16 sites, against over 30 entities which had incorporated 30,000 to 50,000 companies involved in illicit activities. The process to remove around 10,000 of these companies from the company register had been commenced.
• Identification of around £50 million in UK property related to companies owned by organised criminals, by the Insolvency Service intelligence teams, which is subject to ongoing asset recovery investigations,
• Analysis of over 100,000 shell companies incorporated over the last 20 years, known to be involved in illicit activities including online gambling fraud, cryptocurrency and foreign exchange investment frauds, proliferation financing and cybercrime. Investigations have begun into a number of these companies with a view to winding them up in the public interest or referring them to Companies House for dissolution.
• Development of closer enforcement opportunities to tackle company directors who fail to comply with a disqualification order.

The Department for Business and Trade and Companies House will continue to work together to lay the secondary legislation required to enact the relevant ECCTA provisions.

By summer 2025, Companies House anticipates being able to allow access on request to certain trust information on the Register of Overseas Entities and receive and assess applications from individuals seeking to suppress their day of birth for documents registered before 10 March 2015, signature, business occupation, and residential address in most other instances.

By autumn 2025, Companies House anticipates being able to make identity verification a compulsory part of incorporation and new appointments for new directors and PSCs. It will begin the 12-month transition phase to require more than 7 million existing directors and PSCs to verify their identity, which will happen as part of the annual confirmation statement filing.

By spring 2026, Companies House anticipates being able to make identity verification of the presenters a compulsory part of filing any document, to require third party agents filing on behalf of companies to be registered as an ACSP and to reject documents delivered by disqualified directors unless they are delivered by an ACSP for specified filings permitted by law.

By the end of 2026, Companies House anticipates being able to require all limited partnerships to submit more information and to complete the transition period for all individuals on the register requiring identity verification and start compliance activity against those who have failed to verify their identity. It will also be able to facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies.

“Our latest report demonstrates how we’re strengthening the UK’s business environment by taking direct action against those misusing corporate structures, while improving the accuracy and reliability of our register for legitimate businesses,” said Companies House chief executive Louise Smyth.

“Our new intelligence capabilities have now already facilitated approximately 850 intelligence reports to law enforcement partners, while our risk-based approach targets resources where they’ll have the greatest impact on economic crime.

“As we prepare for the next phase of implementation, including mandatory identity verification by autumn 2025, we remain committed to creating a transparent company register that supports economic growth while making the UK a hostile environment for those looking to commit economic crime,” she added.

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International Tax Planning for Private Clients in the ‘Post Domicile Era’

Thursday 3rd July

Registration and light refreshments from 5.30pm

Conference to run from 6pm to 7.15pm, inclusive of Q&A

Refreshments and networking from 7.15pm to 8.30pm

The Hall & Lightwell, St Martin-in-the-Fields
Trafalgar Square, London WC2N 4JJ

The following topics will be covered:

1. Overview of the new Income Tax (IT) and Capital Gains Tax (CGT) regime for foreign income and gains (FIG). Who is a Qualifying New Resident (QNR).
2. Overview of the new inheritance tax (IHT) regime. Who is / is not a Long-Term UK Resident (LTR).
3. Excluded Property Trusts (EPTs).
   • Impact assessment of new rules: IHT, CGT and IT treatment of EPTs in the post domicile era.
   • EPTs: qualifying conditions for new trusts to be EPTs.
   • Case studies and planning.
4. UK and Foreign Family Investment Companies (FICs) – structure, applicability, tax treatment and case studies.
5. Insurance-based tax planning, with a focus on non-personalised portfolio bonds.
6. Private Client mobility – the countries to which departing UK residents should consider moving to and why.
7. Q&A session to follow.

SPEAKERS

Simon Denton – Managing Director of Sovereign (UK) Ltd

Laurence Lancaster, Head of Tax at Sovereign Group

Venue Access
The Hall & Lightwell, St Martin-in-the-Fields
Trafalgar Square, London WC2N 4JJ
Access via the Glass Entrance Pavilion on Church Path.

RSVP

The post SOVEREIGN UK TAX SEMINAR 2025 appeared first on The Sovereign Group.