The Economic Crime (Transparency and Enforcement) Act 2022 was passed on 15 March 2022. Among other reforms, it will impose the long anticipated duty on those overseas entities who own or wish to buy UK real estate to disclose details of their beneficial owners. The information will be included in a Register to be kept by Companies House and must be updated annually, with criminal penalties for breach. Failure to comply will also mean the entity is prevented from selling, mortgaging or letting the property. The commencement date for this part of the Act is still uncertain but, during its swift passage through Parliament, additional clauses were introduced into the legislation.
One such is the requirement for any overseas entity who sells or enters into certain other transactions involving real estate in England, Wales or Scotland on or after 28 February 2022 to disclose that transaction and its beneficial ownership at the time of the transaction. This seemingly applies even if the entity will no longer own any UK real estate when the Register becomes operational, the date for which has yet to be announced.
We will be publishing further briefings on the Act as more information on its implementation becomes available.
A new Register of Overseas Entities, requiring those behind foreign companies which own UK property to reveal their identities, will also be created under the act. Entities who refuse to reveal their ‘beneficial owner’ will face tough restrictions on selling the property and those who break the rules could face a fine of up to £2,500 per day or up to 5 years in prison.