The new register of overseas entities that hold registrable UK real estate has been launched today, 1 August 2022.
Under the regime, an overseas entity that holds or wishes to acquire certain types of UK real estate (including freehold interests and leasehold interests granted for more than seven years from the date of grant) will need to register with Companies House and provide details of its “beneficial owners” and (in some cases) managing officers. If a beneficial owner is a trustee, information about the trust will also need to be provided. Much of the information about the overseas entity and its beneficial owners will be publicly available (although trust information will only be available for inspection by the tax authorities).
An overseas entity that already holds this type of UK real estate and was registered as the proprietor pursuant to an application made to HM Land Registry on or after 1 January 1999 and before 1 August 2022 must register within six months of the regime coming into force (i.e. by 31 January 2023). Overseas entities that wish to register new acquisitions of this type of real estate at HM Land Registry will not be able to do so from 5 September 2022 without being registered under the regime.
Note that it will not be possible for an overseas entity to apply for registration unless a “relevant person” (such as a lawyer or accountant) first verifies the information to be provided to Companies House. Before a “relevant person” can verify information on an overseas entity, it will itself need to register with Companies House. Overseas entities should bear in mind that verification may not be straightforward. Some information to be provided to Companies House may be difficult or, in practice, impossible to verify to a standard which a relevant person can stand behind. It is natural that relevant persons may feel unable to verify information in the absence of further guidance from the Government on what is expected of them.
Initially, it was suggested that all aspects of the new register would “go live” on the same date (1 August 2022) and that any acquisition from this date would not be able to go ahead until the overseas entity had registered successfully, potentially causing significant disruption to the timetable for ongoing purchases. However, the revised date of 5 September 2022 in relation to new acquisitions is intended to allow time for overseas entities currently engaged in a relevant land transaction to register with Companies House after today's launch and before the purchase completes.
For some ongoing transactions, it may be possible to work towards a completion date prior to 5 September 2022 which allows sufficient time for an application to be made to HM Land Registry by the overseas entity acquirer before that date. If this is not possible, the overseas entity should, as a matter of urgency, establish what information needs to be provided to the register on the entity’s ownership structure, identify a “relevant person” who is able and willing to verify this information and register with Companies House before completion of the transaction.
Overseas entities which already hold UK real estate should also start to consider what will be needed for registration and who will be able to verify the required information.