The Economic Crime (Transparency and Enforcement) Act 2022 was rushed through Parliament earlier this year, after the onset of the war in Ukraine. The Act created the Register of Overseas Entities.
In essence, the majority of overseas companies or other entities which own or intend to acquire UK real estate, must:
- register with UK Companies House; and
- identify the beneficial owners who sit behind the company or other entity through which the land is held or, in some cases, its “managing officers”; and
- if it has disposed of land since 28 February 2022 provide information about that disposal.
Companies House then issues a unique ID number to be given to the Land Registry when any transaction is registered. The new rules apply retrospectively to certain real estate holdings, the purchase dates of which pre-date the legislation.
The Register has been in force since August, but a crucial deadline is approaching on 31 January 2023. By that date, registrable overseas entities will need to have registered with Companies House under the new rules.
Failure to comply by 31 January:
- is a criminal offence, and
- renders the real estate un-sellable. The Land Registry will be unable to process any transaction in cases where registration of the overseas entity has not taken place.
For more information please contact Caroline Cropley or Paul White or your usual Druces adviser.