Register of Overseas Entities with Property Interests in the UK – An Update and Reminder
Action Still Needed
The Deadline Has Passed – Action Still Needed
The deadline of 31 January 2023, for the registration of overseas entities with property interests in the UK, with Companies House has now past.
An estimated 13,000 relevant overseas entities had not registered by the deadline, approximately 40% of the total.
Considerable work needs to be committed to the verification process, before an application for registration can be made.
In addition, overseas entities that owned a qualifying estate on February 28, 2022 and have subsequently disposed of their interest, are also caught by the rules.
A summary is listed below. For comprehensive detail, please see our previous article here.
Who needs to register?
The beneficial owner of any overseas entity (being a corporate body, partnership or other legal person) governed by the laws of a country or territory outside of the United Kingdom that owns, leases or disposes of qualifying real estate.
Submission of information and verification
The register is a digital service with information submitted in English.
Before any application for first registration or later updating applications/rectifications and amendments can take place, the information will be subject to formal verification by a relevant person.
Broadly, a relevant person includes an independent legal professional, financial institutions, auditors, estate agents, auction platforms etc.
Once the information has been verified the relevant person will need to confirm to the Companies House Registrar that it has completed verification in accordance with the new Act and regulations and provide a statement complying with Part 2 (5) of The Register of Overseas Entities (VPI) Regulations 2022. If the relevant entity has made no relevant dispositions between 28 February 2022 and the date the application is made, the application must state this.
The information itself must be retained by the relevant person for a period of 5 years.
What happens once registration is accepted?
Companies House then publish the identity on a public register and assign a unique Overseas Entity ID. The name of the relevant entity and their agent will be available to the public on the Companies House website. The Overseas Entity ID will be required by the Land Registry before it registers any dealings relating to real estate in England & Wales.
The 2022 Act requires registered entities to update their information annually.
Secondary legislation allows individuals to be able to protect some of their information from public disclosure in limited circumstances (if it can be shown that an individual, or the people they reside, with will be at serious risk of violence or intimidation).
Failure to comply with registration and/or within the time limits imposed?
In England and Wales a person guilty of an offence is liable on summary conviction to a daily fine of up to £2,500 or unlimited fines and a prison sentence of up to 5 years. Failure to register will also prevent any dealings with the real estate in question.
What can Dixcart do to help you?
We can keep you up to date of the latest developments, assist and advise you on your obligations and aid in collecting the required information.
We can also verify the required information for you and make the application for registration to Companies House and communicate the unique Overseas Entity ID number to you as well as process annual returns.
Additional Measures in the Future
Following the introduction of the Economic Crime (Transparency and Enforcement) 2022 Act (“ECTE ACT”), which came into force on 01 August 2022, the UK Government is now seeking further measures with the introduction of the Economic Crime and Corporate Transparency Bill, which is already past Committee stage in the House of Commons.
The register of overseas entities will be amended to maintain consistency with changes intended to the Companies Act 2006.
Amongst the other far reaching and significant changes intended by the Bill are:
- reforms to Companies House including the introduction of identity verification for all new and existing registered company directors
- reforms to prevent the abuse of limited partnerships by tightening registration requirements and increasing transparency
- additional powers to seize and recover suspected criminal crypto assets by boosting criminal confiscation powers
- reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime
- new intelligence gathering powers for law enforcement and removal of nugatory burdens on business.
Additional Information
If you have any questions or think you may need to register your overseas entity, please get in touch with the Dixcart office in the UK: advice.uk@dixcart.com.
