The Economic Crime (Transparency and Enforcement) Act 2022
The Economic Crime (Transparency and Enforcement) Act 2022 (the “Act”) created the Register of Overseas Entities (“ROE”) at Companies House to make it more difficult for bad actors to launder dirty money through property in the UK and to increase transparency around property ownership. Most overseas entities (“OEs”) with legal or beneficial interests in UK registered property were required to register on the ROE by 31 January 2023. OEs acquiring UK land for the first time must also ensure that they are registered on the ROE before making an application to HM Land Registry to register their purchase.
However, there is a continuing annual duty on OEs to keep the information on the ROE up-to-date. The first anniversary of the commencement of the Act fell on 1 August 2023. This means that some OEs will soon be required to file an update to the ROE at Companies House. This must be done whether or not there has been any material changes in ownership. Failure to do so will be a criminal offence by the OE (and potentially by its officers). It will also mean that the OE will not be able to dispose of its land in the UK until the updating duty is complied with.
The registered OE has an obligation to file any required information with Companies House within 14 days after each update period. The OE must review all information on the ROE about itself and its beneficial owners or managing officers, and will be asked either to re-confirm the existing information or to update any information that may have changed. Any new information will need to be verified in the same way as the information provided for first registration. If there is any new information, then OEs should consider the time needed to do this in order to comply with the time limits.
In most cases, the process can be done online with a fee of £120 payable on each update. However, if there are trusts involved or the address of any beneficial owners or officers is protected, the process must be carried out using paper forms.
The duty to update continues as long as the OE legally owns property in the UK. HM Land Registry has a considerable backlog of properties whose ownership needs to be updated – anecdotally, we have heard of delays of more than two years. Legal ownership of land only passes on registration of the disposition, which means that an OE which has sold property in the UK in recent years should check that the registration has been completed and it has indeed been taken off the proprietorship register and does not need to confirm or update its details on the ROE.
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