1 January 2023 deadline for registering overseas entities owning

UK land

If you own UK land through an overseas entity, you should consider

if the following new rules apply to your circumstances. If they do,
details of the entity and beneficial owners must be provided to
Companies House by 31 January 2023. Here’s what you need to
know.

On 15 March 2022, the Economic Crime (Transparency and Enforcement) Act

2022 received royal assent. This act sets out the law regarding the register of
overseas entities (“The Register”), a public register containing information about
non-UK entities that own UK land and their beneficial owners. The Register,
which is maintained by Companies House, opened on 1 August 2022.

Why has The Register been introduced?

The reason for the introduction of The Register is to identify the beneficial owners
of UK land (held via offshore entities) and thereby makes it more difficult for
organised crime to launder money through UK property.
The Register is distinct, and not to be confused with the Trust Registration
Service.

Who must register?

Overseas entities that hold land purchased in England and Wales from 1 January
1999 must provide information to Companies House about itself and its beneficial
owners by 31 January 2023.
Overseas entities not already registered, that wish to purchase UK land going
forward, must register before they’re permitted to register their title on the land
registry.
If an overseas entity has sold UK property since 28 February 2022, it must make
a statement to Companies House about the sale and the land in question.
The Register must be updated annually.

HQ: 12 Hay Hill, Mayfair, London W1J 8NR, UK T:+44 7423 657848 www.wandillla.com
What is an ‘overseas entity’?
An overseas entity is defined as a legal entity governed by the law of a country or
territory outside of the UK, including a company, partnership or other entity that is
a legal person under the law by which it is governed.

What is a registerable beneficial owner?

There are three types of potential registerable beneficial owner - individuals,
governments and public authorities, and other legal entities. They will, broadly, be
a registerable beneficial owner where they hold, directly or indirectly, more than
25% of the shares or 25% of the voting rights in an overseas entity. If they’re able
to appoint or remove a majority of the board of directors or exercise significant
influence or control over the overseas entity, they will also be considered a
beneficial owner.
If a potential beneficial owner has the right to exercise, or actually exercises,
significant influence or control over the activities of an entity which is not a legal
person under the law by which it is governed (e.g. a trust) and that entity meets
one of the previous conditions, they are a beneficial owner.
Where there are no registerable beneficial owners, the overseas entity must
provide details of its managing officers.

Do trusts need to register?

Trusts are not within the scope of The Register and as such, trusts which hold UK
land directly do not have to register. However, if a non-UK corporate trustee holds
UK land directly, the corporate trustee will be an overseas entity and will be
required to register.
If a corporate trustee meets one of the conditions above making it a registerable
beneficial owner of an overseas entity which holds UK land, details of the trustee
will need to be supplied along with details of the settlor, beneficiaries and other
persons with certain powers over the trustee.

HQ: 12 Hay Hill, Mayfair, London W1J 8NR, UK T:+44 7423 657848 www.wandillla.com
Information notices to identify beneficial owners
An overseas entity must take reasonable steps to identify its registerable
beneficial owners and obtain the required information. This includes issuing an
‘information notice’ to a person it knows or believes is a registerable beneficial
owner. The person must respond to the notice within one month. Not complying
with a notice or making a false statement is a criminal offence and can result in a
fine and/or imprisonment.

What information must be disclosed on The Register?

The overseas entity must provide basic information about itself (name, address,
country of incorporation, contact details etc.). It must also submit a statement
setting out what information it has been able to gather about the beneficial
owners (or managing officers) and provide this information.
Some of the information supplied to Companies House must be independently
verified and this can only be done by certain persons e.g. lawyers, accountants
and tax advisers. Where information is required to be verified, it must be done on
the basis of documents or information obtained from a reliable source, which is
independent of the person whose identity is being verified.

What information can the public see on The Register?

Although The Register is public, not all information will be available for public
inspection. For example, dates of birth and residential addresses of registerable
beneficial owners will not be available, among certain other information.
If a trust is a registerable beneficial owner, information regarding the trust, its
beneficiaries, current or past beneficial owners, settlors, grantors and interested
persons must be provided. However, this information will not be available publicly
and it will only be shared with law enforcement and other public authorities.

How to register
A Companies House online account must be created and information relating to
the entity, its beneficial owners and the person that completed the verification
checks must be provided, as well as the contact details of someone that can
discuss the application. It costs £100 to register.

HQ: 12 Hay Hill, Mayfair, London W1J 8NR, UK T:+44 7423 657848 www.wandillla.com
Consequences of non-compliance
Non-compliance can result in a daily fine of up to £2,500 per day or a prison
sentence of up to five years.
In addition, restrictions will be put in place to prevent certain transactions from
being undertaken in relation to the UK land e.g. the sale of the land. There will
also be restrictions placed on registering land on the land registry. This may
impact on the term of any borrowings secured on the UK land.
Given the consequences of non-compliance it's vitally important that offshore
entities holding UK land consider the new rules carefully and take steps to comply
with them at the earliest opportunity as the deadline coincides with the annual tax
return filing deadline.

HQ: 12 Hay Hill, Mayfair, London W1J 8NR, UK T:+44 7423 657848 www.wandillla.com