Register of Overseas Entities: At a glance

The Register of Overseas Entities launched on 1 August 2022.

Overseas entities who own, buy, sell, or transfer property or land in the UK are required to register with Companies House to:

• Provide details of their registrable beneficial owners or managing officers.
• Meet annual compliance obligations which require this information to be kept up to date.

After registering, the overseas entity receives a unique Overseas Entity ID which it used with the Land Registry when it buys, sells, transfers, leases or charges UK property or land.

The rules apply retrospectively to overseas entities who bought property or land on or after:

• 1 January 1999 in England and Wales.
• 8 December 2014 in Scotland.
• 1 August 2022 in Northern Ireland.

Entities that have disposed of property or land after 28 February 2022 also need to register and give details of that disposal.

Entities have a deadline of 31 January 2023 to provide details of their current ownership or qualifying disposals.

Non-compliance with this regime could result in:

• Being unable to register or dispose of land.
• Fines of up to £2,500 per day.
• Prison sentences of up to five years.

There is a six-month transitional period for registrations to be completed from when the register comes into force.

Registration requirements & deadlines

A UK-regulated Agent must complete verification checks on all beneficial owners and managing officers of an overseas entity before it can be registered.

• The Agent will need to provide an Agent assurance code and an overseas entity verification checks statement to confirm that it has done this.
• The Agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. 
• Agents should complete verification checks no more than three months before the overseas entity is registered.
• If the Agent that carried out the verification checks is also registering the overseas entity, it completes a 'Verification checks statement' as part of the registration service. Otherwise, it will need to submit an overseas entity verification checks statement.

See Registration of Overseas Entities: Agent Guide

Overseas owners of UK property need to register and report beneficial ownership to Companies House and keep this Required Information up to date through annual compliance.

The regime applies to entities that owned UK land acquired:

• On or after 1 January 1999 for land in England and Wales.
• On or after 8 December 2014 for land in Scotland.
• On or after 1 August 2022 for land in Northern Ireland.

Entities that disposed of property or land after 28 February 2022 are also required to register and give details of that disposal.

What is an overseas owner of UK property?

• An overseas entity as a legal entity, i.e. a body corporate, partnership or other entity, that is governed by the law of a country or territory outside the United Kingdom.

What are the steps for the Registration of Overseas Entities?

Overseas owners will need to meet the following conditions to register title to land.

• Identify the beneficial owners and register them with Companies House.
• Ensure that a UK-regulated Agent has verified the required information for the beneficial owners.
• Pay a £100 registration fee.
• Keep the Register up to date annually.
• All information provided to Companies House must be delivered in English.

What is a beneficial owner? 

A beneficial owner is any person (whether an individual or entity) that has significant influence or control over the overseas entity. 

Persons can be:

• An individual.
• Another legal entity, such as a company.
• A government or public authority.
• A trustee of a trust.
• A member of a firm that is not a legal person under its governing law.

Registration is compulsory for an individual person, other legal entity, government or public authority who:

• Directly or indirectly holds more than 25% of the shares.
• Directly or indirectly exercises more than 25% of the voting rights.
• Directly or indirectly, is able to appoint or remove a majority of the entity’s board of directors.
• Have the right to, or actually exercise, significant influence or control over the entity.

If one or more of the above conditions are met, disclosure under these provisions will need to be made unless the beneficial owner is a legal entity that has its own disclosure requirements or an exemption applies.

Registration is compulsory if the beneficial owner is a member of a firm that is not a legal person under its governing law and:

• The members of that firm (in their capacity as such) hold, directly or indirectly, more than 25% of the shares in the entity
• The members of that firm (in their capacity as such) hold, directly or indirectly, more than 25% of the voting rights in the entity.
• The members of that firm (in their capacity as such) hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
• The members of that firm (in their capacity as such) have the right to exercise or actually exercise, significant influence or control over the company.

A firm is a partnership, unincorporated association or other entity that is not a legal person under the law by which it is governed.

Trusts

Registration is compulsory if the beneficial owner is a trustee of a trust and:

• The trustees of that trust (in their capacity as such) hold, directly or indirectly, more than 25% of the shares in the entity.
• The trustees of that trust (in their capacity as such) hold, directly or indirectly, more than 25% of the voting rights in the entity.
• The trustees of that trust (in their capacity as such) hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company.
• The trustees of that trust (in their capacity as such) have the right to exercise or actually exercise, significant influence or control over the company.

If trustees of a trust are registerable beneficial owners, information will be required about that trust, including details about people or entities that are:

• Current or past beneficial owners.
• Beneficiaries.
• Settlors.
• Grantors.
• Interested persons.

Note that trusts may not meet the definition of Legal Entity, but still may require registration under the Trust Registration Service.  

Exemptions

Beneficial owners are exempt from registration if:

• The holding is through one or more legal entities.
• The person is a beneficial owner of every legal entity through which they hold an interest.
• They hold the interest in the overseas asset through an entity that has its own disclosure requirements. This includes companies that must register on the PSC register and eligible Scottish partnerships which are within the scope of the Scottish Partnership (Register of people with significant control) Regulations 2017.
• In certain circumstances, the Secretary of State can provide an exemption.

What are the tax implications of the register?

Information on the register will be available to HMRC and will be used to identify tax non-compliance of:

• Overseas legal entities.
• Overseas legal arrangements.
• Beneficial owners (including settlors, beneficiaries, etc).

Relevant tax compliance matters for overseas entities owning UK property include:

• Stamp Duty Land Tax (SDLT) 15% higher rate charge for high-value residential property and 2% non-resident surcharge.
• Annual Tax on Enveloped Dwellings (ATED) returns.
• Gains made on UK property.
• UK Permanent establishments.
• Domicile and Inheritance tax on UK residential property (trustees only).

Entities concerned that they have not paid the right amount of tax should tell HMRC by 28 February 2023 by making a disclosure using the Worldwide Disclosure Facility (WDF). See Agent guide to Register of Overseas Entities.

Required Information

The definition of required information depends on the type of entity involved.

Overseas Entity: Required Information:

• The name of the entity.
• The country of incorporation or formation.
• Details of the registered or principal office.
• A service and email address.
• The legal form of the entity and its governing law.
• Any applicable public register and registration number.

Individual: Required Information:

• Name, date of birth and nationality.
• Usual residential address
• A service address.
• The date on which the individual became a beneficial owner in relation to the overseas entity.
• How the beneficial owners meet the conditions of beneficial ownership.
• Whether the conditions are met as the beneficial owner is a trustee.
• Whether the beneficial owner is a designated person under the Anti-Money Laundering Act 2018.

Governments, public authorities and other legal entities: required information

• Name.
• The principal or registered office.
• A service address.
• Legal form and law by which it is governed.
• Details of any public register that the entity may be listed on and an applicable registration number.
• The date on which the entity became a beneficial owner in relation to the overseas entity.
• How the beneficial owners meet the conditions of beneficial ownership.

Trusts: required information:

• The name of the trust or a description to allow it to be identified.
• The date the trust was created.
• In respect of trustees who are beneficial owners in that capacity:
  • Their name.
  • The date they became a beneficial owner in that capacity.
  • If relevant, the date they ceased to be a beneficial owner.
• Relevant information for each beneficiary who is a beneficial owner under the trust.
• Relevant information for each settlor or grantor if they were beneficial owners of the overseas entity.
• Relevant information for an ‘interested person’ (a person who has the rights to appoint, remove or direct trustees) including the date they became an interested person.

Managing Officers: required information

• Name, date and nationality (if an individual, just name, if not).
• Residential, registered or principal office and service address as applicable.
• Legal form if a non-individual and the law under which it is governed.
• Business occupation if any individual.
• Description of the officer’s roles and responsibilities in relation to the entity.
• The name of an individual who may be contacted about a non-individual managing officer.

Property disposals

If the entity has disposed of UK property or land since 28 February 2022, it will also need to report:

• The deed or title number of the land or property.
• The date that the land or property was disposed of.
• Details of any additional beneficial owners or managing officers at the time the land or property was disposed of.

Penalties

An offence is committed if after the end of a six-month transitional period the entity:

• Is the registered owner of the land, but not either:
  • Registered as an overseas entity.
  • Made an application for registration.
  • Exempt from registration.

Non-compliance with updating duties and provision of the required information is considered a criminal offence by:

• The entity.
• Every officer of the entity who is in default.

Penalties can include:

• Daily fines which run until the compliance requirements are met.
• Imprisonment up to five years.

Financial penalties can be secured by way of raising a charge over land.

Penalties can also be levied for misleading, false or deceptive material and statements.

Restrictions on land registration and disposal for non-compliance

Land cannot be registered with the Land Registry and disposals can be restricted unless the overseas entity is:

• Registered.
• Exempt from being registered.

De-registration

An overseas entity can apply to be removed from the register when it ceases to have an interest in UK property.

Note that the relevant period for removal from the register ends on the date the application for removal is filed.

Annual Updates

An annual update is required to confirm that the details on the register are correct.

The update is due 12 months after the date the overseas entity was registered, or within a year of your last update statement.

Entities require an authentication code to file the annual update online.

If verification of any details is required these must be made by an ROI registered agent who will need to enter their own agent code.

The annual update may require the re-entering of data held on the register.

Verification & annual updates

If no information has changed, no verification checks are required.

Verification checks must be completed on any information that has changed including on any new beneficial owners and managing officers that are being added.

Verification checks must be carried out no more than three months before the date of the update statement.

See Companies House: File an overseas entity statement.

Background

The Register of Overseas Entities comes into force in the UK through the new Economic Crime (Transparency and Enforcement) Act 2022.

The Government has long intended to introduce a Register of Overseas Entities similar to the Register of Persons with Significant Control regime. There has been a prior Call for evidence and Feedback on draft legislation has previously been sought in 2017 and 2019 respectively.

The Economic Crime (Transparency and Enforcement) Act 2022 received Royal Assent on 15 March 2022 after being fast-tracked through Parliament.

Useful guides on this topic

Trust Registration Service
What is the Trust Registration Service? What trusts does it apply to? What are the requirements and deadlines?

Register of Persons with Significant Control (subscriber version)
What is the Register of Persons with Significant Control (PSC)? Who must complete it? Who is a Person with Significant Control? What details must be included on the Register?

External link

Economic Crime (Transparency and Enforcement) Act 2022