Crunch-time for overseas entities owning UK property
Legal Development 17 January 2023 17 January 2023
UK & Europe
UK Real Estate Insights
Overseas entities that own registered land in the UK are required to register on the Register of Overseas Entities at Companies House by 31 January 2023. If an overseas entity fails to register on time, it and its managing officers commit a criminal offence, punishable by a fine or imprisonment. What is more, from 1 February 2023, any unregistered overseas entity will effectively be unable to sell, lease or charge its registered property.
These requirements were introduced last year by the Economic Crime (Transparency and Enforcement) Act 2022. Specifically, the Act requires any overseas entity which acquires or has acquired registered property in England and Wales since 1st January 1999 (and for Scotland, 8th December 2014) to register on the Register of Overseas Entities and to identify the overseas entity's beneficial owners. Under transitional provisions, overseas entities which owned registered property before 1st August 2022 had a six-month deadline, ending on 31st January 2023, to complete this registration. After this date, the Land Registry will not register a ‘relevant disposition’ (ie a transfer, grant of lease of more than 7 years or charge) by an overseas entity unless at the time of the disposition the overseas entity is registered on the Register or the transaction is exempt.
As at 31st December 2022, only 10,000 of a targeted 31,500 overseas entities had registered so there is a long way to go and the deadline is approaching fast.
If you are one of those who hasn't yet registered, you need to do so quickly. To get up to speed, we suggest that you:
- Take a look at our earlier insights: The Register of Overseas Entities - What you need to know; and The Register of Overseas Entities - What you need to know - An update. Together, these identify the basic registration requirements and explain what information you need to provide about your ownership structure.
- Appoint a UK regulated agent to verify your beneficial ownership information. The process cannot be completed without a UK-regulated agent authorised by Companies House. Following advice by the Law Society of England and Wales, we like most law firms have decided not to undertake verifications, but there are a number of third-party verification agents which are assisting overseas entities with the registration process.
- Familiarise yourself with this Companies House blog which lists some top tips on how to speed up the process.
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