It is important for all overseas entities who own or deal in UK property to know that it is now compulsory to be registered in the UK Register of Overseas Entities (ROE). B P Collins’ property lawyers advise.
The Register of Overseas Entities (ROE) was launched on 1 August 2022 under the Economic Crime (Transparency and Enforcement) Act 2022 (the Act), requiring overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers before 1 February 2023. The transition period allowed for disposal of property without registration until 31 January 2023, but any overseas entity which continues to own UK property past this date must be entered into the Register or face criminal consequences.
The Act applies to any company, partnership (including LLPs) or other entity with separate legal personality which is governed by the law of a non-UK country or territory and is, or intends to be, registered as the proprietor of a ‘relevant interest’ in property’ in the UK. This includes companies or partnerships which are incorporated in jurisdictions such as the British Virgin Islands, Jersey, Guernsey and the Isle of Man. The Act does not apply to overseas individuals who own property directly or through a UK entity.
An entity will hold a ‘relevant interest in property’ for the purposes of the Act if it holds a freehold or lease for a term of over seven years over a property in England and Wales, where the property was acquired after 1 January 1999. The definition is different in Scotland and Northern Ireland
The Register
The overseas entity must apply to Companies House with information about its beneficial owners and/or managing officers and must update this information annually. The overseas entities will then be issued a unique Overseas Entity ID (OE ID).
A ‘beneficial owner’ has a complex definition but includes any person or entity who holds 25% of shares or voting power in the overseas entity or has the right to exercise significant influence or control over the entity. Only some of this information will be made available to the public. The overseas entity must also give any beneficial owners one month’s notice, asking them to confirm that the relevant information remains correct and inviting them to fill out any remaining information.
Those overseas entities, which already hold a relevant interest in property, acquired after 1 January 1999 in England and Wales, had to submit their application to be entered onto the ROE on or before 31 January 2023. Different timelines apply to property in Scotland and Northern Ireland.
Failure to register an overseas entity on the ROE where the entity holds a relevant interest in UK property will amount to a criminal offence by the entity and its officers, as will failure to keep the register up to date. The entity will also not be able to register the acquisition of any UK property with the Land Registry without an OE ID.
For further information on how this could affect a transaction please contact the property team at enquiries@bpcollins.co.uk or call 01753 889995.
