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Overseas entities owning UK property: long proposed public register of beneficial owners and controllers has launched

Posted on 2 August 2022

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Overseas entities owning UK property: long proposed public register of beneficial owners and controllers has launched

This article was last updated on August 2022

The "Register of Overseas Entities", created under the Economic Crime (Transparency and Enforcement) Act 2022, launched on 1 August 2022.

The mechanics of this new public register, which includes details of the beneficial owners of overseas entities owning UK property, were first crafted in the Registration of Overseas Entities Bill in 2019. The new Economic Crime Act builds on that draft legislation, with some important changes.

Describing the rationale for the new legislation, the Government has stated that the new register "will require anonymous foreign owners of UK property to reveal their real identities to ensure criminals cannot hide behind secretive chains of shell companies, setting a global standard for transparency."

Restrictions on acquisition of UK land

The Act provides that if the beneficial owner or controller of an overseas entity that owns UK land has not registered their identity at Companies House, a restriction will be placed on the title that will prohibit that entity from selling, leasing or mortgaging that land.

The requirements will apply retrospectively to overseas entities that own land in England and Wales that has been acquired since 1 January 1999 (different requirements apply for Scotland and Northern Ireland). There will be a 6-month transition period from 1 August 2022 for those overseas entities that already own land, but the Act requires any overseas entity registering to confirm that it has not disposed of any property since 28 February 2022. If in fact it has disposed of any property since that date, it must also give details of that disposal as well as details of its beneficial ownership as at the time of the disposal.

Additionally, if an overseas entity disposes of UK land between 28 February 2022 and the end of the six-month transition period, it must still register details of that disposal plus details of its beneficial ownership as at the time of the disposal. This must be done by the end of the transition period, and so all overseas entities are caught by the requirement to register, unless they disposed of their UK land holdings before 28 February 2022. 

An overseas entity will also be prohibited from buying UK land, or taking a leasehold interest of more than seven years, unless the identity of its beneficial owner or controller has been registered at Companies House.

Although the new register opened for applications to register from 1 August, the restrictions on acquisitions of land will take effect from 5 September.

Each entity that completes the necessary registration is allocated an "overseas entity ID" number. Any ordinary individual or UK company selling UK land to (or buying from) an overseas entity will need to be satisfied that the entity holds a valid ID, otherwise completion of the transaction will be held up.

Every overseas entity must update its beneficial ownership and control details at least once every 12 months. If it does not, it will be banned from buying, selling, mortgaging or leasing UK land until this is remedied. A purchaser buying from an entity with a valid ID will therefore check when the 12 month renewal falls and will stipulate that the entity's details must be duly updated in time for the completion date.

For all these purposes, "owning" land is defined as being registered as proprietor at the Land Registry. This could lead to anomalous results where an entity has sold the land and collected the sale proceeds but is still shown as proprietor due to delays in processing at the Land Registry.

There is some provision for the Secretary of State to validate certain dispositions to innocent third parties that would otherwise breach the new rules, where fair to do so.

Who needs to appear on the new register?

Under the UK's current "People with Significant Control" (PSC) regime, all UK companies have since 2016 had to register the identity of controllers and beneficial owners. The register of overseas entities owning UK land is closely modelled on the PSC regime. Very broadly, overseas entities owning UK land are required to register details of those who hold, directly or indirectly, more than 25% of the shares or voting rights, those who can appoint or remove a majority of the board or those who have the ability to exercise significant influence or control over the entity.

The register focuses on "legal entities" with legal personality under local law and does not therefore require the registration of trusts. Trustees of a trust with the requisite control over an overseas legal entity do, however, need to be registered, along with anyone else who has the right to exercise, or actually exercises, significant influence or control over the trust. The Act also requires those trustees with the requisite level of control to provide certain information about the trust when applying for registration on the register. Alongside these requirements, the separate mechanism of the Trust Registration Service (TRS) requires beneficiaries and controllers of UK express trusts and other trusts acquiring UK land to be identified and registered with HMRC. The TRS is not a publicly available register, although law enforcement agencies and individuals who have a "legitimate interest" in a specified trust can apply for the relevant information.

Verification of information

A key consideration for purchasers will be the accuracy of the information regarding beneficial owners on the register. In a significant change since the earlier iteration of the legislation, the Act provides that the beneficial owner information must be verified before an overseas entity applies for registration (or updates information on the register). The Register of Overseas Entities (Verification and Provision of Information) Regulations 2022 set out who can verify the information (certain types of "relevant person" under the UK's Money Laundering Regulations) and the standard of verification required (on the basis of documents or information obtained "from a reliable source which is independent of the person whose identity is being verified"). Verifying information that results in false or misleading information being submitted to Companies House could result in criminal liability for the verifier of that information.


As well as the restrictions on buying and selling properties outlined above, the Act also provides for various criminal offences for non-compliance, which includes fines of up to £2,500 per day or up to 5 years in prison.

Next steps

Review of existing overseas entity property structures should be prioritised. Any property sales since 28 February and all current property sales by overseas entities should be carefully considered to ensure that the reporting obligations of the entity are met. Offshore corporate service providers will also need to review their obligations. 

The Government has also recently published a White Paper on corporate transparency and register reform, confirming the Government's intention to proceed with a wide range of reforms to Companies House, including new statutory powers and responsibilities for the Register of Companies, identity verification requirements for directors, beneficial owners and agents, increased data sharing powers, privacy mechanisms with respect to the abuse of personal information on the register and changes to the reporting of financial information to Companies House. The Government indicated during the House of Lords debates on the Economic Crime (Transparency and Enforcement) Act that a second Economic Crime Bill, addressing some of these reforms, would be introduced in the then next (now current) session of Parliament.

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