Register of Overseas Entities – 12 months on

Requirement to register

Last year, we wrote about the opening of the Register of Overseas Entities (“ROE”) which went live at 9am on 1 August 2022.

The introduction of the register by The Economic Crime (Transparency and Enforcement) Act 2022 required all overseas entities owning UK real estate* to sign up to the ROE maintained by Companies House.

The deadline to register was 31 January 2023, as we reminded in our article earlier this year.

*The requirement to register applies retrospectively in England, Wales and Scotland, but not Northern Ireland – as described below:

• Entities which have owned property from 1 January 1999 in England and Wales;
• Entities which have owned property from 8 December 2014 in Scotland;
• In Northern Ireland, the rules only affect interests held in land from when the land registration rules of the Act came into force – 5 September 2022.

Overseas entities were also required to register by the 31 January deadline if they had disposed of land in any UK jurisdiction at any time since 28 February 2022.

Duty to update

The obligations of overseas entities do not stop at registration. As mentioned in our previous articles, overseas entities have continuing obligations to provide annual update statements to Companies House.

With the register having opened 1 year ago, the first annual updates are fast approaching and the first will require to be made from 14 August 2023.

Further details on the update statement process are set out below:

When to update

Overseas entities have 14 days from the “statement date” to file the update statement.

The “statement date” is defined as the following (as applicable):

• a year from the date the overseas entity was registered; or
  • a year from the registration of the overseas entity in the ROE; or
  • a year since the overseas entity’s last update statement.

How to update

The update statements are to be submitted via an online Companies House system. At the date of writing (1 August 2023), the functionality to submit is not yet live, but it is expected that submissions can be made from 14 August 2023.

• No changes – Update statements must be filed, even if there have not been any changes to the overseas entity or its beneficial owners during the 1 year period.
• Changes required – Where there have been any changes to the statement, i.e., charges to the beneficial owners, these must be declared and all changes must undergo “verification checks” before the statement can be submitted.

• Verification Checks

“Verification Checks” must be carried out on any information being changed by an update statement and the checks must be carried out no more than 3 months before the date of the update statement.

The checks can only be conducted by a UK regulated agent, supervised by the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.

Solicitors are included within this category and Mills Selig can offer further guidance and support in respect of verification checks.

Consequences of late filing

If an update statement is not submitted on time:

• this is considered a criminal offence and could lead to prosecution or a fine;
  • it will invalidate the overseas entity ID, meaning that the entity will not be able to buy, sell, transfer, lease or charge its UK property;
  • a note will be added to the public record of the overseas entity to record the late filing.

Key takeaways

• The first annual update statements will become due from 14 August (depending on when the overseas entity in question was registered as an entity or when they registered in the ROE).
• Any changes to the statement may require verification by a regulated agent, so early planning and communication with your professional advisers is key.
• Late filing is a criminal offence. It will invalidate the overseas entity ID and prevent any dealings with the entity’s UK property, as well as being liable for a fine or prosecution and a “black mark” on the entity public record.

If you have any further questions on this topic or require specialist advice, please get in touch with us.

The team at Mills Selig are here to advise you on the implications of the Economic Crime (Transparency and Enforcement) Act 2022 and specifically how it applies to real estate in Northern Ireland. Please do not hesitate to be in touch with a member of the team if you have any questions.

Editorial prepared by Jayne Paterson, Consultant, Commercial Property @ Mills Selig

---

If you have any further questions on this topic or require specialist advice, please get in touch with us:

Chris Guy, Managing Partner, Head of Corporate – Chris.Guy@MillsSelig.com

Anna-Marie McAlinden, Partner, Commercial Property and Head of Climate & Energy – Anna-Marie.McAlinden@MillsSelig.com

---

Having the right legal advice at the right time is crucial – our expert team offers clear, concise and problem solving legal advice.

For further information on Mills Selig’s expert legal services and how we can help your organisation, click: https://millsselig.com/our-expertise/

#YourLegalTeam #Understanding #Expertise #Experience