Overseas entities to register with Companies House before buying, selling or securing UK land

An upcoming change in law, which has been in the pipeline for many years but has received renewed focus in light of the current situation in Ukraine and associated sanctions against Russia, will see the introduction of a public register of beneficial owners of overseas entities that own or buy land in the UK.  Non-compliant entities may face restrictions in buying, selling or securing land in the UK.

The Register of Overseas Entities, to be introduced to Parliament as part of the Economic Crime (Transparency and Enforcement) Bill on 1 March 2022, is the latest government move intended to address concerns about a lack of transparency around beneficial owners of land in the UK and the use of land for money laundering purposes.

Once it comes into effect, overseas entities with an interest in land in the UK will be required to disclose their beneficial ownership structure on a public register maintained by Companies House.

Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, is quoted as saying the legislation would “send a clear warning to those who have or who are thinking about using the UK property market to launder ill-gotten gains.”

The Register of Overseas Entities will apply retrospectively to property bought by overseas owners up to 20 years ago in England and Wales and since December 2014 in Scotland. It will be held by Companies House, with support from the UK’s Land Registries.  Our current understanding is that for Northern Ireland the registration requirement will only apply to new purchases of land.

The government is working to get the register up and running within "a few months".

In addition, a White Paper was published on 28 February 2022 in which the government sets out plans to upgrade Companies House. 

Proposals mean:

  • Anyone setting up, running, owning or controlling a company in the UK will need to verify their identity with Companies House
  • Companies House will be given the power to challenge information that appears dubious, and will be empowered to inform security agencies of potential wrongdoing
  • Company agents from overseas will no longer be able to create companies in the UK until at some future date the UK government determines that their jurisdiction has equivalent anti-money laundering laws to the UK
  • The quality of information provided by companies to Companies House will be improved, so that the thousands of small companies who rely on it to make business decisions can trust who they are doing business with
  • Filing processes for small businesses will be streamlined and digitalised
  • Company directors will be better able to protect personal information published by Companies House, which might put them at risk of fraud or other harm

We are reviewing the detail of the Economic Crime (Transparency and Enforcement) Bill and the Corporate Transparency and Register Reform White Paper with a view to sharing more detail on the government proposals.

For further information in relation to this topic, please contact Sarah Dugdale, Associate in ALG's Belfast Corporate and M&A team.

Date published: 1 March 2022