Much of the talk about and political reasoning behind the fast tracking of the Overseas Entities Register is aimed at the prevention of illicit funds entering the UK through the residential property market. However, as the recently enacted legislation affects all registered land ownership in the UK, it will equally have an effect on overseas businesses operating in the retail and leisure sector as well as those transacting with them.
The Economic Crime (Transparency and Enforcement) Act 2022, which was given royal assent on 15 March, requires any overseas entity who owns a freehold or leasehold over 7 years in the UK to become a “registered overseas entity” on the new public register of overseas entities to be set up at and operated by Companies House. The registration will need to include certain information about the overseas entity itself and its registrable beneficial owners. Whilst the exact details and method of registration on the register of overseas entities are as yet unclear, they will need to be satisfied before land can be dealt with. An overseas entity may not sell or grant a lease of more than 7 years without being on that register and consequently any UK entity looking to buy or take a lease from an overseas entity will need to be able to satisfy themselves that the new rules have been complied with so that they themselves may get their title registered at the Land Registry following the transaction. With many shopping centres or commercial developer landlords being companies registered in Jersey or other offshore jurisdictions, operators looking to take new space or extend their existing leases should take care that their landlord has complied with these new rules once they are in force. The rules, although not in force yet, are expected to be so shortly, with potentially very little notice.
For further details contact Sarah Morley or your usual Charles Russell Speechlys contact.
A new Register of Overseas Entities, requiring those behind foreign companies which own UK property to reveal their identities, will also be created under the act. Entities who refuse to reveal their ‘beneficial owner’ will face tough restrictions on selling the property and those who break the rules could face a fine