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Overseas entities owning UK property: long proposed public register of beneficial owners and controllers is becoming reality

Posted on 3 March 2022

This article was last updated on 17 March 2022

The Economic Crime (Transparency and Enforcement) Act, which received Royal Assent on 15 March, introduces among other measures a "Register of Overseas Entities".

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."

The mechanics of this new public register, which will include 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.

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 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 (when the legislation was first introduced as a Bill to Parliament). 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.

There has also been an important change since the Bill was first published. 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. 

This is quite different from the previous version of the Bill, which originally would have allowed overseas entities to keep these details private provided they had ceased to own any UK land by the end of the transition period. All overseas entities are now caught by the requirement to register, unless they disposed of their UK land holdings before 28 February 2022. 

We do not yet know when the six-month transition period will start running. It will commence on the date that the main provisions of the Act come into force, and the Government has not yet announced when that will be. There may be a short delay as Companies House and the three UK Land Registries need time to get their new systems up and running. 

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.

Each entity that completes the necessary registration will be 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. Similarly, a delay in registering beneficial ownership or control of an entity at Companies House, which could result, for example, from a surge of initial applications, may also delay completion of transactions.

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. Nevertheless, the overall impression is that the Government is now minded to make things difficult and time-consuming for those acquiring UK land through overseas entities, even where motivated by legitimate concerns such as safety and privacy.

Who will need to appear on the new register?

Under the UK's current "People with Significant Control" (PSC) regime, all UK companies already have to register the identity of controllers and beneficial owners. The register of overseas entities owning UK land will be closely modelled on the PSC regime. Very broadly, overseas entities owning UK land will be 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 will, 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.

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 now provides that the Secretary of State must by regulations make provision requiring the verification of information before an overseas entity applies for registration (or updates information on the register).


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.

Timing and next steps

The Government's press release accompanying the Act confirms that Companies House will now begin work to implement the register as quickly as possible, working closely with the UK’s 3 land registries. The Government fact sheet that accompanied the legislation when it was introduced to Parliament as a Bill acknowledged that in practical terms system changes will be required at Companies House to implement the register, noting that Companies House has received increased funding to transform its operations, including delivering the new register.

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, will be introduced in the next session of Parliament.

Offshore corporate service providers will need to review their obligations. We would recommend that the task of reviewing existing property structures is prioritised given the time frames mentioned and any property sales since 28 February and all current property sales by overseas entities are carefully considered to ensure that the reporting obligations of the entity are met. 

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