UPDATE – Key changes to Overseas Entities owning property in the UK

The Register of Overseas Entities (‘the Register) at Companies House went live on 1st August 2022. As detailed in our (see related article below), its purpose is to record information regarding beneficial ownership by Overseas Entities of UK ‘Qualifying Estates’. We highlighted the need for clients with property interests that are owned by Overseas Entities (or sold, transferred or to be purchased by them) to be familiar with the new regime requirements, since the penalties for non-compliance are severe. Core details on how to register are now summarised below.

Deadlines

There is a 6-month transition period for existing overseas owners of Qualifying Estates to register with Companies House (ending 31 January 2023). This applies retrospectively to Overseas Entities who transacted in England and Wales on or after 1 Jan 1999 (or 8 December 2014 in Scotland). Any Overseas Entity acquiring property from now on must register it at Companies House, as from 5 September 2022 new purchasers will be unable to register their title with the Land Registry without doing so.  Qualifying Estates that are disposed of after 28 February 2022 and before 1 February 2023 should apply to the Register, giving details of their disposition.

Registration Process

The stages leading to registration are:

1. Identify any Beneficial Owners. An Overseas Entity must provide an information notice to those it believes to be registrable Beneficial Owners. Recipients must respond within one month. If they believe they meet the criteria of a registrable Beneficial Owner, they will need to provide the required information. Where no registrable Beneficial Owners are identified, details of the Overseas Entity’s managing officers should be given.
2. Verification Process. The registrable Beneficial Owner’s details must be ‘verified’ by a UK-regulated agent. This can be a legal professional (but not an in-house solicitor) or other agent subject to the UK anti-money laundering regulations (such as financial institutions). Verification must take place no more than 3 months before registration.
3. Registration Process. Either the Overseas Entity or the verifier should submit an online form to register. The verifier will need to submit a statement confirming their compliance with the requirements of the verification process, within 14 days of the application. The registration fee is £100.
4. Registration ID. If accepted, the Overseas Entity will be added to the Register and Companies House will issue an Overseas Entity ID number. A notice of registration containing the ID number will be emailed to the Overseas Entity who must submit this to the Land Registry when buying, leasing, transferring, or registering charges against the land. An Overseas Entity wishing to purchase UK property needs to apply for an ID before the purchase happens, as the ID number will be required by the Land Registry upon completion. Failure to provide this could result in an abortive purchase.

There is an ongoing obligation to update the Register and complete the verification process annually. Detailed guidance on registration, including a list of the information to be submitted, can be found here.

Article contributor, Isabelle Blumenthal.