Companies House has announced that it expects the commencement order for the new register of overseas entities owning UK property to be laid on 1 August 2022, and the register to come into effect on the same date.

The new register is being 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 will have to be listed on a public register maintained by Companies House.

Any overseas entity that becomes, or has since 1 January 1999 become, the registered owner of any UK land will have to go on the register.

In-scope overseas entities will be 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 a lawyer, 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 are 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.

A number of uncertainties remain around how the new register will operate in practice, including the steps needed for verification. Further guidance from the government and/or Companies House is expected on the regime and we will cover this once published.

We have published a snapshot on how the regime will impact land transactions and a guide with tips on how to prepare for the new register coming into effect.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.