A Register of Overseas Entities was first proposed in 2016. Whilst progress over recent years has been slow, its establishment was given fresh impetus by the current tragic events in Ukraine.
A Register of Overseas Entities was first proposed in 2016. Whilst progress over recent years has been slow, its establishment was given fresh impetus by the current tragic events in Ukraine.
In early March, the Government announced its intention to bring in a new Register of Overseas Entities (to be maintained by Companies House) recording the beneficial owners of any overseas entity owning property in the UK. This formed a key part of measures brought in to crack down on foreign criminals using property in this country to launder money. The Register has been set up from scratch by Companies House in a matter of months and went live on 1 August 2022.
An overseas entity is any corporate body, partnership or other entity which is a separate legal person under its governing law and which is governed by the law of a country or territory outside the UK. So, despite the context in which this new Register has been expedited, its requirements are not limited to overseas entities from any particular jurisdiction - they apply to all non-UK entities owning property in the UK (including, for example, companies incorporated in the Channel Islands or the Isle of Man).
A beneficial owner is basically someone holding (directly or indirectly) more than 25% of the shares or voting rights in the overseas entity, someone holding the power to appoint or remove a majority of the directors of the overseas entity and someone having the right to exercise (or actually exercising) significant influence or control over the overseas entity.
The definition of a beneficial owner is largely modelled on the existing “People with Significant Control” regime, brought in under UK company law in 2016.
From 5 September 2022, the overseas entity will not be able to apply to register the transaction at the Land Registry unless it has first registered its beneficial owner details on the Register of Overseas Entities (so that, using the terminology in the relevant legislation, it becomes a “Registered Overseas Entity”). Whilst this may at first sight appear not to be your problem, legal title in the property will not pass to the overseas entity (and will remain in your hands) unless and until registration has been effected at the Land Registry. You do want to be certain therefore that the overseas entity is a Registered Overseas Entity before completing the transaction.
Where the overseas entity was registered at the Land Registry as owner of the property on 1 August 2022 (and was first registered on or after 1 January 1999), a restriction will be placed on its title which will take effect on 1 February 2023. This restriction will prevent a disposition by the overseas entity from being registered at the Land Registry unless (subject to certain exceptions) the overseas entity was a Registered Overseas Entity at the time of the disposition. Therefore, if your application for registration at the Land Registry is made on or after 1 February 2023, you will need to be certain that the overseas entity is a Registered Overseas Entity before completing the transaction. As mentioned, if you cannot register the transaction at the Land Registry, legal title will not pass to you.
On becoming a Registered Overseas Entity, Companies House will allocate to the overseas entity an overseas entity ID (which will have to be supplied to the Land Registry in due course). You will therefore need to ask for this ID before completing the transaction.
You should also include in any sale and purchase agreement (or agreement for lease) clauses:
It is believed that there are over 30,000 overseas entities that will need to apply to register their beneficial ownership details by 31 January 2023 (overseas entities will commit a criminal offence if they fail to do so). Registration is a complex process requiring verification of details by a professional falling within the scope of UK Money Laundering Regulations and it is believed that, at present, registration is a purely manual exercise at Companies House’s end. There are therefore likely to be considerable delays in overseas entities effecting registration and the possibility of such delays should be taken into account when agreeing timescales for transactions at the outset.
Professional Development Lawyer
david.harris@brownejacobson.com
+44 (0)115 934 2019
Law firm Browne Jacobson has collaborated with Wiltshire Council and Christ Church Business School on the launch event of The Council Company Best Practice and Innovation Network, a platform which brings together academic experts and senior local authority leaders, allowing them to share best practice in relation to council companies.
In the Autumn Statement delivered on 17 November, rises to the National Living Wage and National Minimum Wage rates were announced, to take effect from 1 April 2023.
Announced in September but scrapped on 17 November the investment zone proposals were very short lived. The proposal has now morphed into the proposal for a smaller number of clustered zones earmarked for investment.
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship.
On 2 November 2022, the Supreme Court handed down its judgment in the much awaiting case of Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30. The Court’s judgment suggests that the long established practice of using drop-in applications is in fact much more restricted than previously thought. This judgment therefore has significant implications for both the developers and local planning authorities.
Across the UK, homelessness is an urgent crisis, and one that is set to grow amid the rising cost of living. Local authorities are at the forefront of responding to this crisis, but with a lack of properties that are suitable for social housing across the UK, vulnerable individuals and families are often housed in temporary accommodation.
Updates include UK Shared Prosperity Fund, contracts, Subsidy Control Bill, data controller liability, Government Covid-19 procurement and Highway Code revisions.
The complex and rather nebulous transitional subsidy control regime set out in the UK-EU Trade and Co-operation Agreement and the UK’s wider international commitments has made it difficult for public authorities and those working with them to proceed with certainty where subsidies are involved.
Investment zones have been introduced by the Conservative party to get the United Kingdom (UK) ‘working, building and growing’. They are to be designated sites which provide time-limited tax incentives, streamlined planning rules and wider support for local growth to encourage investment and accelerate the development of housing and infrastructure that the UK needs to drive economic growth. Processes and requirements that slow down development will be stripped back with the intention of attracting new investment.
Created at the end of the Brexit transition period, Retained EU Law is a category of domestic law that consists of EU-derived legislation retained in our domestic legal framework by the European Union (Withdrawal) Act 2018. This was never intended to be a permanent arrangement as parliament promised to deal with retained EU law through the Retained EU Law (Revocation and Reform) Bill (the “Bill”).