The countdown for overseas owners of property in the UK to comply with the tightened register regime following the government's clampdown on economic crime is nearing its conclusion, with less than two weeks to go until the deadline for the submission of applications to Companies House (31 January 2023).
Following the passing of the Economic Crime (Transparency and Enforcement) Act 2022 (the Act) in March of last year, the Companies House register of overseas entities became live on 1 August 2022. Here is what you need to know:
- Overseas entities already owning property in the UK will face criminal sanctions if they do not apply to Companies House with details of their ownership structure, including the details of their registrable beneficial owners, by 31 January 2023. Following the implementation of updated land registration provisions on 5 September 2022, the Land Registry has placed restrictions on the titles of freehold and leasehold estates owned by overseas entities. If the overseas entity was registered as the owner of the property before 1 August 2022 the restriction will prevent them from dealing with the property after 1 February 2023 unless they are registered at Companies House by that date. If the overseas entity has been registered as the owner of property after 1 August 2022 then the restriction prevents dealing immediately after the point at which it is entered onto the relevant title by the Land Registry.
- An overseas entity seeking to purchase, lease or grant security over UK property from now on will need to have registered at Companies House before completing its acquisition or financing. Current turnaround time for registration at Companies House is approximately 48 hours, although as the number of applications will no doubt increase as we edge closer to the deadline, it may be that applications take longer to process in the coming days.
An additional hurdle in the registration process is the need for the information submitted as part of an overseas entity's application to register at Companies House to be verified by a "relevant person." Verification by someone such as a regulated company service provider is required upon initial registration of the overseas entity (as well as before each required annual update to Companies House), and we understand that verifiers are currently very busy, with some unable to accept new instructions.
As such, any overseas entities which already own UK property and which have not yet applied to Companies House need to be taking steps immediately to begin the process. For further detail on the regime, please see our detailed briefing here.