Real Estate Blog: The Economic Crime (Transparency and Enforcement) Act 2022 (‘the Act’) Part 3
Part 3 of 4 – The operation of the Companies House register
An overseas entity must apply to become registered by submitting information to Companies House about itself, its beneficial owners, and its officers, whenever registered as the legal owner of a freehold or leasehold interest in UK property, or risk significant criminal penalties.
The register will contain a list of registered overseas entities, details of pending applicants, copies of documents provided, and any other information required by the Act or subsequent regulations made by the Secretary of State.
The register will be available for public inspection, but certain personal information will not be made available under data protection legislation (including dates of birth, residential addresses, and personal email addresses).
If the overseas entity has made any relevant dispositions of qualifying property between 28 February 2022 and when it makes the application, the application must include details of the disposition, including the date and the relevant title number(s).
Companies House will record the date of registration and the overseas entity ID in the register and issue an ‘overseas entity ID’ to the applicant, which will be used for registration of any qualifying property at HM Land Registry. A statement issued by the government on 26 April confirmed that secondary legislation is needed before the register can be launched to cover verification requirements, a protection regime for beneficial owners/company officers, and to mandate digital delivery of information to Companies House.
There will be an ongoing duty to update the register annually (within a 14-day period). Failing to comply with this duty will constitute a criminal offence by the entity, and every officer of the entity in default, punishable by fine and in serious cases, imprisonment.
An overseas entity will have the right to apply for removal from the list of registered overseas entities, with removal taking effect when it is established it is no longer registered as the proprietor of qualifying property.
The Government statement indicates that Companies House is making progress to build the register as a digital platform, with collaboration from HM Land Registry. The aim is to facilitate registration as soon as possible once the system goes live, with further enhancements to the functionality of the system anticipated during the transitional period.
However, we do not currently have any details as to how the register will work in practice. For example:
- How long will it take to register for the first time?
- How much will the application/updating fees be?
- Will overseas entities be provided with a registration certificate to satisfy the restriction on the title, or will HM Land Registry simply search registration status online?
- If there is a backlog, will evidence that an application has been made to Companies House be sufficient for HM Land Registry, or will transactions be delayed pending registration?
We will continue to update you as we learn more on the practicalities.
If you would like any further information in relation anything covered in this Real Estate Blog, please do not hesitate to contact Alice Dockar, Francis Dalton, Aamir Hussain or Lucy Johnson. Look out for the fourth and final blog in this series, which will explore the consequences for real estate transactions.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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