The Economic Crime (Transparency and Enforcement) Act 2022 has received Royal Assent.
As part of the Economic Crime Act, a new Register of Overseas Entities is being created to provide greater transparency of property ownership in the UK, inform investigations into suspicious wealth and to ensure legitimate business.
The introduction of the Register creates consistency with property owned by UK companies, who already need to disclose their beneficial owners to Companies House.
Who will be required to register?
The new measures apply to foreign owners of UK property, including
- All non-UK beneficial owners that directly or indirectly own any UK property; and
- Corporates, partnerships, trusts and other entities.
A beneficial owner is someone that has significant influence or control over the entity, for example they hold 25% or more of the shares or voting rights.
When will the Register be implemented?
Companies House intends to introduce the Register as soon as possible. There will be a six-month window to register property.
There will be a requirement for any foreign company selling a property between 28 February and the full implementation of the Register to submit their details at the point of sale.
The Act will also apply retrospectively to property bought since 1999 in England and Wales.
What information needs to be registered?
An overseas entity will be required to identify its beneficial owner(s) and to register them with Companies House.
In England, owners will be required to record details of properties held since 1 January 1999. The Register must be updated on an annual basis to confirm ownership arrangements.
Required information includes:
- Country of incorporation or formation;
- Registered or principal office;
- A service address;
- An email address;
- The legal form of the entity and the law by which it is governed; and
- Any public register in which it is entered and, if applicable, its registration number in that register.
What are the implications of not registering?
Anonymous foreign owners of UK property will be required to reveal their identity. There will be sanctions for anyone not disclosing their beneficial owner, including restrictions when trying to sell or lease their land. If already registered, there will be restrictions over dealing with their land.
Managing officers of companies not adhering to the new regulations could face a fine of up to £2,500 a day or up to five years in prison.
Should you have any queries on the new Register of Overseas Entities please get in touch with your M+A Partners contact or email email@example.com