Interest holders: Indirect control
Indirect control refers to situations in which there is an intermediary between the reporting body and the interest holder(s). This can happen when a shareholder or rightsholder:
- is not a natural person (human being), or
- is a natural person but is holding the votes or shares on behalf of or for the benefit of another
If this applies to your situation, you must find out who controls that intermediate entity or person by following the chain of control to the ultimate interest holders. The interest holders listed on a transparency report must be a natural person – that is, a human being – and not controlled by anyone else.
Read more about:
- Indirect control through a single intermediary (simple structures)
- Indirect control through two or more intermediate entities or persons (complex structures)
- Special rules for indirect control
Each type of intermediate entity or person has its own test of control set out in the Land Owner Transparency Regulation (PDF).
Control of relevant corporations
If in looking through the chain of intermediaries, you encounter an intermediary which is not a relevant corporation or trust, you are not required to report any interests relating to that corporation or trust. However, control of other relevant corporations or trusts which may be included in a separate branch of ownership must be determined in accordance with the example below.
Example of control of relevant corporations
For example, if ABC Company owns an interest in land, and
- Corporation A owns 40% of the shares of ABC Company and is also not a relevant corporation, and
- Corporation B owns 60% of the shares of ABC Company and is a relevant corporation
Then ABC Company does not need to work through the ownership of Corporation A to identify an interest holder relating to Corporation A’s shares.
However, ABC Company does need to determine the interest holders connected to Corporation B to include in the transparency report (unless another excluded corporation appears in that chain of intermediaries).
This information is provided for your convenience and guidance and is not a replacement for the legislation.