As part of the new Economic Crime (Transparency and Enforcement) Bill in February 2022, a new Register of Overseas Entities is being created and will be held by Companies House.
The new register, which came into force on 1 August 2022, forms part of the government’s strategy to combat economic crime, and will require overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers.
Therefore, any foreign company wishing to buy UK property will have to identify its beneficial owner and present verified information to Companies House before any application to the UK’s land registries can be made. Those overseas entities that already own land in the UK that is in scope will have a 6-month transitional period, starting from 1 August 2022, to register their beneficial owners or managing officers.
It is advised that there will be be severe sanctions for non-compliance, including financial penalties, imprisonment up to 5 years and even restrictions on buying, selling, transferring, leasing or charging land or property in the UK.
To ensure that criminals are effectively targeted, the register applies to overseas entities who:
bought property or land on or after 1 January 1999 in England & Wales;
bought property or land on or after 8 December 2014 in Scotland,
Northern Ireland overseas entities will only need to register property/land bought in Northern Ireland on or after 1 August 2022.
NB* Entities that disposed of property or land after 28 February 2022 will also need to give details of those dispositions.
The Bill forms part of a wider package of legislative proposals in a bid to tackle illicit finance and strengthen the powers of Companies House. Other proposals include requiring anyone setting up, running, owning or controlling a company in the UK to verify their identity with Companies House, as well as giving Companies House the power to challenge information that appears suspicious.
The name of the overseas entity and its beneficial owners will be publicly available on Company’s House Find and update company information service once the registrations have been accepted. However, secondary legislation confirms that individuals may be able to protect their information from public disclosure under certain circumstances.
Individuals can apply to protect their information if they believe the activities of their overseas entity, or the characteristics of the individual (when associated with that overseas entity), will put them or any persons closely associated to them, at serious risk of violence or intimidation. The application process will be similar to the process already in place for company directors, LLP members and PSCs.
Companies House guidance for registering an overseas entity can be found here: Register an overseas entity and tell us about its beneficial owners – GOV.UK (www.gov.uk)
For HM Land Registry’s guidance on overseas entities, please see: Practice guide 78: overseas entities – GOV.UK (www.gov.uk)
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