The UK Government has announced that the Register of Overseas Entities (part of the Economic Crime Act) will go live on the Companies House website on 1 August 2022. From this date, property owners will have six months to comply with the new rules. Failure to comply will result in a daily fine of £2,500, or a prison sentence of up to five years for the most serious contraventions.
The register requires non-UK entities owning UK property to register their identities. Under the Act, a non-UK entity is defined as any entity that is a legal person under the law by which it is governed and will include companies, foundations, some partnerships, and nominee arrangements but will not apply to trusts.
The register aims to ensure that criminals cannot hide their property ownership behind chains of shell companies. The rules apply to non-UK entities and to any individual who holds more than 25% of the shares or voting rights in the entity. The register will capture property bought up to 20 years ago in England and Wales, and since December 2014 in Scotland.
Non-UK entities must provide their registration details, addresses, and contact details to Companies House otherwise they will not be able purchase, sell or transfer UK land. Individuals must provide details including their name, date of birth, nationality, and address.
Companies House will soon be writing to the companies within the scope of the legislation. All non-UK legal entities owning UK property should act now to ensure they do not open themselves up to daily fines and, potentially, imprisonment.
Sanctuary can provide advice in determining your obligations under the Economic Crime Act, including any administrative or filing requirements.
Given the ever-increasing legislation surrounding UK land, now may be a good time to consider whether it is appropriate to continue holding property within the current structure. Our experienced advisors can also provide support in this respect. For any further information, please contact us using the details below.