Property Registration on overseas entities
Posted on: January 4th 2023 · read
The register of Overseas Entities came into force with effect from 1 August 2022 and requires that previously anonymous beneficial owners of UK property and landowners be identified in a publicly available register.
The implementation of this legislation has been accelerated in response to concerns about the effective enforcement of sanctions following Russia’s invasion of Ukraine. It will affect any individual or entity that owns UK land or property via a non-UK company, either now or at any time since 28 February 2022. Non-UK legal entities that own UK property are also now required to disclose their beneficial ownership to Companies House. Such companies must register with Companies House and provide beneficial ownership information no later than 31 January 2023.
Before a company can be registered under the new rules, the information being registered must be verified by a person regulated under the UK’s anti-money laundering regulations. After registration, an overseas entity will be provided with an ID number which must be provided on the land registry whenever it buys, sells or transfers land or property in the future.
Who is a beneficial owner?
A beneficial owner is any individual or entity that has significant influence or control over the overseas entity.
It can be:
- An individual person
- Another legal entity, such as a company
- A government or public authority
- A trustee of a trust
- A member of a firm that is not a legal person under its governing law
The definition of a registrable beneficial owner (RBO) for the purpose of these regulations is similar, but not identical, to the definition of a person with significant control (PSC) for a UK company. If the RBO is acting as trustee of a trust, details of the settlor and beneficiaries must also be provided but will not appear in the public version of the register. They will be accessible to HMRC. Overseas entities that disposed of property or land in Scotland, England and Wales after 28 February 2022 will also need to report details of those disposals.
Existing landowners must register within 6 months of the rules taking effect from 1 August 2022. Therefore, registration is required by 31 January 2023 for overseas entities that bought property or land on or after:
- 1 January 1999 in England and Wales
- 8 December 2014 in Scotland
- 1 August 2022 in Northern Ireland
Failure to comply could result in a fine or a prison sentence. If you are affected by the legislation and have not yet taken steps to comply, your advisor will be able to assist with the verification and registration process, which will require sufficient supporting evidence of the ownership structure.
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