The Economic Crime (Transparency and Enforcement) Act aims to prevent UK property being used by overseas entities to launder money in the UK and requires that the beneficial owners of land and property in England and Wales be listed on a public register at Companies House.
The Act places the obligation to register on the overseas entity. Non-registered status risks frustrating the underlying transaction. It is therefore imperative that you understand and act accordingly if this affects your property transaction.
The key provisions of the Act are summarised below. Please note that many of the provisions are retrospective in effect and therefore affect transactions that may have already completed. Please seek advice if you think any of the below apply to you.
- An “Overseas Entity” is one governed by the law of a country or territory outside the UK (so will include places such as Jersey and the Isle of Man)
- The new registration system came into force on 1 August 2022
- Overseas entities which acquired or will be acquiring land in England and Wales after 1 January 1999 will need to be registered on the Register maintained by Companies House
- Overseas entities which have disposed of or will be disposing of land in England and Wales after 28 February 2022 will need to be registered on the Register maintained by Companies House
- Overseas entities acquiring land in England and Wales (or proposing to do so) after 1 August 2022 will not be able to register their title to the land unless they have been registered
- Once registered, overseas entities will be required to update their registration annually
- There will be a transitional period of 6 months (to 1 February 2023) for overseas entities to comply with the registration requirements
- Non-compliance may result in criminal offences being committed by the overseas entity and its officers and the land registration system will be used to identify offenders.
In light of the above, please consider whether you might be affected by these provisions and contact our team should you have any questions.