25 October 2022
On 5 September 2022, the land registration provisions introduced by the Economic Crime (Transparency and Enforcement) Act 2022 (the “Act”) came into force. The Act requires overseas entities that own UK property, or who are in the process of acquiring UK property, to be registered at Companies House on the Register of Overseas Entities (the “Register”). An overseas entity must also give notice of their beneficial owners or, if there are none, the details of each managing officer.
Government guidance on the Act and registration process can be found here:
The effect of the Act
An overseas entity will not be able to sell, transfer or dispose of any relevant UK property unless it appears on the Register at Companies House and has been provided with an overseas entity ID number (“OEID”).
Who does this Act apply to?
The Act applies retrospectively to overseas entities who bought property or land on or after 1 January 1999 in England and Wales.
The Act also applies retrospectively to overseas entities who disposed of their land in England and Wales after 28 February 2022.
What is relevant property for the purposes of the Act?
For England and Wales the following types of properties are caught by the Act:
- any freehold interest in property; or
- any leasehold interest for a term of more than seven years.
What happens if you don’t comply?
- Non-compliance could result in a fine of up to £2,500 per day or a prison sentence of up to 5 years. A defaulting party may also face restrictions when buying, selling, transferring, leasing or charging property or land in the UK. As above, HM Land registry will not register the transfer or disposal of property until compliance with the Act meaning legal title to the property will not pass from the seller to the buyer.
How to get registered?
The overseas entity will need to have its details and their beneficials owners/ managing officers details verified by an authorised UK agent. The agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. The agent will be required to obtain an assurance code from Companies House prior to verification and submit a statement in relation to the verification checks. Once the registration is approved the overseas entity will then be given an OEID.
What can we do for you?
Phillips Law can answer any questions you have in respect to overseas entities purchasing UK property and will guide you through the registration process.
Please do not hesitate to get in touch with one of our Commercial Property team for more information.
Please call us or email and we’ll get back to you as soon as possible.
- 01256 460830
- [email protected]
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