Overseas companies who own UK land or property have until 31 January 2023 to register with the UK Companies Registry, unless they are exempt. If the deadline is missed you can face severe sanctions (including imprisonment) or be restricted from selling your UK property.
New legislation
Following Russia’s invasion of Ukraine, Parliament expedited the passing of the Economic Crime (Transparency and Enforcement) Act 2022 (the “Act”). The Act came into force on 1 August 2022 and introduced the Register of Overseas Entities (“RoE”). The idea of the RoE is to provide greater transparency on the beneficial ownership of overseas entities that hold property in the UK. The idea is that the record of this information should bolster the country’s effort to combat money laundering.
Who needs to register?
Overseas entities that wish to acquire property in the UK must now register on the RoE.
The Act also applies retrospectively to overseas entities who acquired property on or after 1 January 1999. For these entities, it is necessary to register on the RoE by 31 January 2023.
Additionally, any overseas entities that disposed of property between 28 February 2022 and 31 January 2023, need to provide details to Companies House of that disposal. Again, this will only apply if the entity disposing of the property acquired it on or after 1 January 1999.
The Act also impacts overseas entities which are tenants of registrable leases lasting more than 7 years.
For those overseas entities who acquired a property in the UK before 1 January 1999, the need to register on the RoE will depend on the date the entity’s application was made to Land Registry to register as the proprietor.
What information must be provided?
Registrable overseas entities need to provide to the Companies House details of beneficial owners. Where a beneficial owner is an individual, their personal details will need to be disclosed to the Companies House, including their name, date of birth, nationality, residential address and a service address when registering the overseas entity, although the information in relation to the individual beneficial owner’s residential address and the exact date of birth will not be publicly displayed. A statement of why they meet the conditions of being a beneficial owner is also required. This information must be verified by a ‘UK-regulated agent’, such as a legal professional, accountant or a tax advisor, before it is published on the RoE.
What are the consequences of failing to register?
The sanctions are severe. Any registrable overseas entity that has failed to register by 31 January 2023 will have a restriction entered on the title of their property, meaning that they cannot transfer/sell that property. Furthermore, it is a criminal offence not to register if registration is required. Those in default will face a fine, as well as possible imprisonment.
The deadline to register is fast-approaching. If you need help to register or have any queries regarding your obligation to register, please contact our Company Commercial or Property Team on +44 20 7354 3000 or enquiries@colmancoyle.com