UK: Overseas Entities Register impacts UK land ownership from 1 August 2022
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The UK's new Register of Overseas Entities goes live on 1 August 2022. This will have significant implications for overseas entities who own, dispose of or acquire a registered or registrable interest in UK land or buildings.
The Economic Crime (Transparency and Enforcement) Act 2022 ("Act") was introduced earlier this year. You can read our previous detailed alert on its impact on UK land ownership for overseas entities here.
Here's a summary of key dates and implications:
The new Overseas Entities Register introduced by the Act goes live on 1 August 2022. The Register will be maintained by Companies House.
From 1 August 2022, legal entities (including partnerships) incorporated outside the United Kingdom ("UK") which own, dispose of or acquire UK land, or grant a registrable lease or charge over such land, will need to register themselves in the Overseas Entities Register.
Existing owners of land acquired since 1 January 1999 must be registered as an overseas entity no later than 31 January 2023, even where no disposition of that land is proposed.
From 5 September 2022, it will be an offence for an overseas entity to dispose of UK land, or grant a registrable lease or charge over it, unless the disposer has registered as an overseas entity prior to disposal. This date is extended to 1 February 2023 in the case of disposals by existing owners.
From 1 August 2022, a restriction will be added to each existing and new registered title of UK land owned by an overseas entity, to ensure compliance with the Act's requirements. These include an obligation to annually update the Overseas Entities Register details.
From 5 September 2022, all overseas entities which acquire a freehold or registrable leasehold interest in land (including the taking of a lease for seven years or more), will need to be registered at Companies House prior to their Land Registry application.
HM Land Registry should be contacting current overseas entity landowners to confirm the new Companies House requirements. However, such registration will be in the hands of the overseas entity, and early steps to register are advisable to avoid future transactional delays or statutory contravention.
Companies House have issued guidance on the process of overseas entities registration. This includes a requirement for information (in particular as to the entity's beneficial ownership) to be verified by an approved UK-based agent supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
Civil and criminal sanctions can be imposed for failure to comply with the Act. These can extend to managing officers of the overseas entity in certain circumstances.
Note that, in this alert, references to the UK are to England, Wales, Scotland and Northern Ireland, and references to "land" includes buildings on such land.
The land ownership implications imposed by the Act are significant both for overseas entities and those involved in transactions with them. For further information and to discuss what these measures might mean for you, please get in touch with your usual Baker McKenzie contact.
Please note that the original publication date of this alert is 29 July 2022.
Justin Salkeld
Justin.Salkeld@bakermckenzie.com
Ben Farnell
ben.farnell@bakermckenzie.com
Stefanie Price
stefanie.price@bakermckenzie.com
Jo Shakespeare
Knowledge Lawyer
jo.shakespeare@bakermckenzie.com