Research by the BBC and Transparency International suggests that some 18,000 of the estimated 50,000 Offshore Entities that own UK land and property have failed to meet the 31 January 2023 deadline to register with Companies House under the UK's new Register of Overseas Entities rules.
The Register of Overseas Entities, launched in August 2022, aims to make the ownership of UK property more transparent.
Entities must report details of their beneficial owners or if no one is identified, as might be the case with, say a large multi-partner Limited Liability Partnership LLP, must provide details of the persons who control and manage the business.
The relevant persons must be independently verified by a UK-registered agent.
Researchers compared Land Registry Data to Companies House records in making their findings.
The concern is that some Offshore Entities have deliberately chosen to ignore the new rules or in other cases, beneficial ownership and registerable data are concealed by the use of complex offshore structures and trusts. Alarmingly, for the UK government which has introduced these rules, researchers have traced Russian property ownership to trusts resident in Crown dependencies
In a further development, there is evidence that the Companies House systems are not fully coordinated. It has written to Overseas Entities who are already on the Register, reminding them to register.
The Register of Overseas Entities applies retrospectively to overseas entities who bought property or land on or after:
- 1 January 1999 in England and Wales.
- 8 December 2014 in Scotland.
- 1 August 2022 in Northern Ireland.
Entities that have disposed of property or land after 28 February 2022 also need to register and give details of that disposal.
Non-compliance with this regime could result in:
- Being unable to register or dispose of land.
- Fines of up to £2,500 per day.
- Prison sentences of up to five years.
There is a six-month transitional period for registrations to be completed from when the register comes into force.
Note that trusts may not meet the definition of Legal Entity, but still may require registration under the Trust Registration Service.
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Useful guides on this topic
Register of Overseas Entities
Overseas owners of UK property are now required to register and report their beneficial ownership to Companies House when they own, buy or sell UK property.
Non-resident landlords and offshore investors index
What taxes are relevant for non-resident property investors? What are the reporting requirements for non-resident investors? A Freeview signpost to our non-resident landlords and offshore investor tax guides.
UK Agent for registration of Overseas Entities
Only UK-regulated Agents are able to assist in the verification and registering of overseas entities that hold an interest in UK land and property.
Campaign: Offshore Companies Owning UK Property
HMRC's ongoing campaign not only reminds company owners to file their Annual Tax on Enveloped Dwellings (ATED) returns, new banding and valuations apply; it also asks the company to remind connected individuals about the Transfer of Assets Abroad rules.
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