On 15th March 2022, the Economic Crime (Transparency and Enforcement) Bill passed into law. Under the new Act, Companies House will create a Register of Overseas Entities. The Register will make it much harder for criminals to use land and property in the UK to launder money. It will require anonymous foreign owners to register their real identities, ending the practice of hiding behind anonymous chains of shell companies.
When is the Register of Overseas Entities being introduced?
The Register will be introduced on the Companies House website imminently.
Who will the new Register affect?
Foreign owners of UK properties will need to register. The measures apply to:
- Companies or other legal entities that are governed by the law of another country or entity (i.e. an overseas entity)
- Individuals who hold more than 25% of the shares or voting rights (i.e. beneficial owners)
In brief, overseas entities will have to identify their beneficial owner(s) and register their details with Companies House. This information will need to be verified. As accountants, THP can help with this process. Once registered, Companies House will issue an overseas entity ID number and the entity will need to update its information annually.
Is the Register of Overseas Entities retrospective?
Yes, it is retrospective. It will apply to property bought in England and Wales since January 1999 and in Scotland since December 2014. In Northern Ireland, it will apply to all land bought since the Act came into force. Overseas entities will also have to register if they have disposed of any UK land since 28th February 2022.
How long do entities have to register?
Overseas entities that currently own UK land will be given 6 months after the launch of the Register to provide details of their beneficial owners or managing officers. Details of managing officers can only be provided when an overseas entity has no registrable beneficial owner.
What happens if an overseas entity doesn’t comply?
Non-compliance will result in financial sanctions. These will include fines of up to £500 per day or a prison sentence of up to 5 years. Restrictions will also be placed on the ability to sell or lease land.
Are there any Register of Overseas Entities exemptions?
There are very few exemptions. The Secretary of State for Business, Energy and Industrial Strategy (currently the Rt Hon. Kwasi Kwarteng MP) can exempt a person in these circumstances:
- In the interests of national security
- In the interest of the UK’s economic wellbeing
- For the purposes of detecting or preventing serious crime.
What happens next?
Once the Register goes live, the clock starts ticking and overseas entities will need to comply with the new rules within six months. It’s best to register as soon as possible to avoid financial penalties. If you need any assistance, please get in touch with one of our accountants.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.