New register for overseas owners of UK property
One of our real estate experts explains the new register introduced for overseas owners of UK property.
The Economic Crime (Transparency and Enforcement) Act 2022 received royal assent on 15 March 2022, meaning that all overseas legal entities that own (or wish to buy) UK property must register with Companies House. The register was introduced on 1 August 2022 to create transparency of ownership and act as a deterrent for those hiding profits of crime in the beneficial ownership of UK property.
How to comply
Any legal entity governed by the law of a country or territory outside the UK is regarded as an overseas entity, including Jersey, Guernsey and the Isle of Man. Overseas entities must take reasonable steps to identify their beneficial owner(s) i.e. any individual, legal entity or government or public authority holding more than 25% of the shares or voting rights in that entity (or satisfying certain other ownership tests). The register follows the “people with significant control” register for UK companies.
As part of registration, details of the name, country of incorporation, legal form and registered office and correspondence addresses for the overseas entity will need to be provided, as well as details of any beneficial owners and the UK-regulated agent that verified the identity of those beneficial owners.
Upon registration, the overseas entity will be given an identification number and it is then their duty to ensure that the register is updated on an annual basis.
Are there any exemptions?
Registration is not required if the overseas entity became the registered owner of the property in England and Wales before 1 January 1999. Under the act, the secretary of state can exempt an individual from the registration procedure by written notice. This must be for the purpose of national security or the prevention or detection of serious crime. If an overseas entity does not own UK property or plan on owning property, it does not need to register.
What happens if an overseas entity does not register with the ROE?
The identification number issued by the registrar of companies will need to be submitted when registering an overseas entity as the owner of UK property, otherwise the application will be rejected by HM Land Registry. A restriction will also be placed on the title to the property following the purchase, which will prevent the registration of any future disposal of the property unless the overseas entity is registered at Companies House at the time.
Disposing of property between 28 February 2022 and 1 February 2023 without registering with the ROE will be a criminal offence and the overseas entity and its officers could be liable for daily fines of up to £2,500 and prison sentences of up to five years.
In the case of overseas entities that are already owners of UK property, they must register at Companies House no later than 1 February 2023. HM Land Registry will also add a restriction to the titles of all such property to prevent the overseas entity from dealing with that property if they do not have an identification number.
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