The new register was introduced by the Economic Crime (Transparency and Enforcement) Act 2022 (ECA), which received royal assent in March. Under the ECA, overseas entities that own, or have a lease of more than seven years over, land or property in the UK must be listed on a public register maintained by Companies House. The relevant land registration provisions take effect from 5 September 2022.
Any overseas entity that becomes, or has since 1 January 1999 become, the registered owner of any UK land have to go on the register.
In-scope overseas entities are required to:
- take steps to identify their beneficial owner(s);
- register basic information about themselves and their beneficial owner(s) at Companies House, and that information must first have been verified by a “relevant person” (such as an accountant or regulated company-service provider); and
- update that information annually (or confirm that the information on the register is up-to-date), again with that information first having been independently verified.
UK incorporated entities were already required to create a register and file information at Companies House about their beneficial ownership, through the register of people with significant control (PSC) regime, and so they are not covered by the new regime. The definition of beneficial owner and the information required in relation to beneficial owners in the ECA are substantially the same as under the PSC regime.
If an overseas entity fails to register with Companies House, or to comply with the duty to update the information, in most cases this will affect the ability of the entity to sell or lease the land, or create a charge over it, as the other party would be unable to register the transaction with the Land Registry. The ECA also sets out various sanctions that could be imposed on the entity, including fines for directors if they fail to comply.
Companies House has issued some guidance on the register, with further expected from BEIS and the Land Registry in due course.
For further information, please contact:
Sarah Hawes, Herbert Smith Freehills