The Register of Overseas Entities (ROE) was conceived as far back as 2017. To increase transparency in property holding and to combat money laundering the UK government held a consultation on creating a register of beneficial owners of overseas legal entities that own UK property.
The register is now live and the deadline for those overseas businesses required to register ownership of UK property passed in January 2023. As a result businesses could now face significant government sanctions if they are caught by the legislation and have not acted to register relevant property holdings.
Below we highlight some of the most common questions about the ROE.
What Is the Register of Overseas Entities For?
The Register of Overseas Entities (ROE) results from the Economic Crime (Transparency and Enforcement) Act 2022. If an overseas entity wants to buy or sell UK property – or already owns it – it must formally register art Companies House with specific information about who the beneficial owners or managing officers of the entity are.
The deadline for registration was 31 January 2023.
Once registered the entity receives a unique ID from HM Land Registry enabling it to undertake property transactions in the UK.
What is an Overseas Entity?
Under the legislation it’s a company or organisation with a distinct legal personality. It must be governed by the law of another jurisdiction. Note therefore that foreign trusts are not treated as overseas entities because they are not considered to possess a separate legal personality.
What is meant by Beneficial Owner under the rules?
The definition of beneficial owner is similar to the definition of who is a Person with Significant Control under UK company law. It can be
- An individual
- A company
- A government or public authority
- A trustee of a trust
To be caught by the registration requirement the beneficial owner must exert a certain degree of control over the entity. So for example in the case of a company the owner needs to hold more than 25% of the voting rights or shares in the overseas entity.
Alternatively ownership will be deemed beneficial (and should therefore be registered) if the owner has the power to appoint or remove a majority of the board of directors of the entity.
What information will be shown on the Public Register?
Most of the information registered on the ROE at Companies House will be publicly available. However personal data such as home addresses, full dates of birth and email addresses will not be visible.
Do I need to update my registration?
The overseas entity must file an annual update one year after it was registered, and every year after that. This will be used to inform Companies House about any changes, or to confirm that the information held is still correct.
Comment
On 1st February 2023 the government announced that that 19510 out of a total of 32440 registered overseas organisations had declared their beneficial owners. While the government has suggested the information gleaned from registration has also been invaluable for tax and revenue services, the figures for registration do nevertheless mean 40% of entities that should have registered have not.
Foreign owners of UK property should not ignore the register. If you have doubts about whether you need to provide information to the register, you should seek legal advice. Failure to comply could result in a fine or a prison sentence. You will also encounter difficulties when buying, selling or mortgaging UK property in future.
Contact Us
For advice on any of the issues we have raised about registrable ownership of foreign property please contact Shubha Nath at Nath Solicitors on 44 (0) 203 983 8278 or get in touch with the firm online.
