Today (1 August 2023) marks the anniversary of the opening of the Register of Overseas Entities (being the register of overseas entities and their beneficial owners which own property in the UK). By now, such overseas entities should be registered (or registered as exempt) at Companies House. However, there are also ongoing filing duties that need to be followed.
A registered overseas entity is under a duty to file an updating statement within 14 days after each “update period”. An update period runs for a period of 12 months beginning with the date of the overseas entity’s registration. If a registered overseas entity fails to comply with the updating duty, an offence is committed by that entity and by every officer of the entity who is in default. There are potentially both criminal and civil sanctions that could be imposed for failure to comply, including significant monetary fines.
An overseas entity who fails to comply with the updating duty is not to be treated as being a registered overseas entity until it remedies the failure. This means that the entity would be treated in the same way as if it had not been registered in the first place. It would subsequently be unable to register any newly acquired qualifying estate. In fact, even just completing such a disposition in default of the statutory requirements would be a further offence under the Economic Crime (Transparency and Enforcement) Act 2022.
Any purchaser of UK property from an overseas entity should also be concerned about this too. Unless that overseas entity has complied with its statutory duties, the buyer’s registrations may also be prohibited.
If you own land in the UK by way of an overseas entity, it’s therefore important that you keep on top of your statutory obligations. And if you’re buying from one, make sure they are compliant!