As of 31 January 2023, any overseas entity (OE) that owns or buys UK land must take reasonable steps to identify its registrable beneficial owners and submit details to Companies House to be included on the Register of Overseas Entities (RoE). Despite the deadline having passed, it is believed that there are still several thousand OEs that have still not registered.
Whilst penalties have yet to be issued, those OEs that have failed to register should do so as a priority. Failure to comply could result in a fine of up to £2,500 per day for an OE, or a prison sentence of up to five years for its officers who are in default. There will also be restrictions on the OE to either buy, sell, transfer, lease or place a charge over the UK land. The rules also apply to OEs wishing to purchase UK land. Care should therefore be taken to ensure that the OE is compliant with the RoE so as not to delay the transaction. Please see our previous article for more information on the requirements to register.
Registration is not the end of the story. OEs have an ongoing annual requirement to file an updated statement. The purpose of the annual statement is to confirm that the information already submitted remains true or to update anything that has changed. If there have been any changes, a UK-regulated verification agent will need to complete the relevant checks. If the information remains the same, this will not need to be re-verified. If an OE has disposed of the UK land, they can apply to be removed from the RoE.
Failure to submit an updated statement will constitute a criminal offence both by the OE and every officer of the OE that is in default. In addition to financial penalties, the overseas entity identification (OEID) number will also become invalid resulting in the OE becoming unable to sell or purchase UK land (or carry out other conveyances). Additionally, a note will be added to the public record stating that a submission has not been made. This will remain in place until a submission has been made.
The deadline to submit the updated statement will be unique to each OE. The updated statement will need to be submitted no later than 14 days after the first anniversary of the initial registration on the RoE. This date can be found on Companies House. If the OE fails to do this by the relevant deadline, the application will be treated as late, and penalties may apply.
It is important to note that the updated statement will only cover 12 months. An OE can submit an updated statement more often if preferred. The deadline to submit the next updated statement would be 12 months after the last statement was submitted. An updated statement must be submitted even where there are no changes to the OE and the information previously registered remains the same.
If shares have been acquired in an OE that is already registered on the RoE, an updated statement does not need to be submitted. The change in information will be swept up in the next annual updated statement.
Updated statements can be submitted online from August. To submit an online application, a six-character authentication code will be required. This ensures that the individual making the application is authorised to do so. The authentication code will be sent to the email address held on record at Companies House. This may cause issues where the previous email address is now inactive. Companies House charge £120 to submit the updated statement.
If the OE involves a trust or if the registrable beneficial owner or managing officers have their information protected at Companies House, a paper application will need to be made and emailed to Companies House. The information from protected applications is logged with Companies House but is not publicly available. Michelmores has experience of advising and assisting OEs in relation to protected applications.
For more information regarding update statements please see the Government guidance: File an overseas entity update statement – GOV.UK (www.gov.uk)
If you have any questions regarding the RoE or would like help with updating an OE’s annual statement or with making a protected application, please contact the TTS team in London.