12 Aug 2022
The new reporting requirements
The 'Register of Overseas Entities' was launched on 1 August 2022 following the enactment of 'The UK's Economic Crime (Transparency) Act 2022' in March this year, which requires overseas entities holding UK land or property to disclose its beneficial owners.
Overseas entities which bought UK land or property on or after the dates shown in the jurisdictions below, must register with Companies House and provide details of their beneficial owners (or in some cases the managing officers) by 31 January 2023.
- England and Wales 1 January 1999
- Scotland 8 December 2014
- Northern Ireland 1 August 2022
Where an overseas entity no longer owns land or property, but did own property after 28 February 2022, the entity must still register and provide details of the disposal.
HM Land Registry, Companies House and H M Revenue and Customs will collaborate closely together. On registration, an 'Overseas Entity ID' will be issued to the overseas entity by Companies House.
Overseas entities acquiring UK land or property for the first time, will be required to register and provide their 'Overseas Identity ID' to the Land Registry before being able to acquire/lease land or property.
Registration costs £100 per entity.
Penalties and wider implications of non-compliance
The aim of this register is to provide greater transparency in relation to the ownership of land and property in the UK, as a result, there are serious repercussions for non-compliance as follows: -
- Penalties up to £2,500 per day
- Potential prison sentence up to 5 years
- Restrictions put in place when buying, selling and leasing land or property (including obtaining mortgages)
Non-compliance could be: -
- Failure to register
- Submitting incorrect information
What is an 'overseas entity' for the purpose of the reporting requirements
An overseas entity is defined as a 'legal entity that is governed by the law of a country or territory outside the UK'.
This includes corporate entities, partnerships and any other entity that is treated as a separate legal person under the law of the country in which it has been registered.
There are no exceptions from registering in cases where an overseas registered entity is a UK resident for UK tax purposes.
Registrable beneficial owners/managing officers
A beneficial owner of an overseas entity is one who directly or indirectly: -
- Holds more than 25% of the shares (directly or indirectly)
- Holds more than 25% of the voting rights (directly or indirectly)
- Holds the right to appoint or remove the majority of the board of directors
- Has the right to exercise, or actually exercises, significant influence and control
Beneficial owners include: -
- Individuals
- Trusts
- Partnerships
- Limited companies
- Any other legal entities
- Government or public authority
In cases where there are no registrable beneficial owners (e.g. where all owners hold less than 25% of the shares, voting rights etc and do not alone exercise significant influence and control), details of the managing officers must be provided instead.
Details to be reported and public access to the Register
The following details must be provided on registration: -
- The entity
- Name
- Registered office and correspondence address
- Legal form
- Registration number
- Country under which it is registered/governed
- Email address
- If the entity has disposed of any land or property since 28 February 2022, details of the disposal and beneficial owners at the time will need to be registered
- The beneficial owners/managing officers
- Name
- Date of birth
- Nationality
- Correspondence/home address
- Date they became a beneficial owner (or managing officer)
- Nature of control
- Where the beneficial owner is a trust, the following must be supplied: -
- Current/past beneficial owners
- Beneficiaries
- Settlors
- Grantors
- Interested persons
Information relating to the name of the overseas entity and the names of the beneficial owners (or managing officers where relevant) will be available for the public to view on the Companies House website, however, personal details such as the full date of birth, home address and email address will not.
Ongoing requirements
Once registered, overseas entities will have a requirement to update the register annually.
Key information
The 'Register of Overseas Entities' will be maintained by Companies House and the link to register is https://www.gov.uk/guidance/register-an-overseas-entity#apply-to-register-an-overseas-entity-and-its-beneficial-owners.
If you have any questions or if you would like our assistance in registering an overseas entity, please get in touch with your main contact at Lopian Gross Barnett and Co, or, send an email to privateclient@lopiangb.co.uk and a member of the team will get in touch.