The Register of Overseas Entities (Register) went live on 1 August 2022. It is a public register of the beneficial ownership of overseas entities that own or deal with relevant UK land interests. While in most cases the legal obligation to register on the Register applied to affected overseas entities with immediate effect, overseas entities that were already registered proprietors of their relevant UK land interests prior to 1 August 2022 (Existing Overseas Owners) were in most cases given an additional six months to register. Time is now running out for Existing Overseas Owners to get themselves registered on the Register by the deadline of 31 January 2023.

There are significant penalties for Existing Overseas Owners who fail to register on the Register by 31 January 2023:

• Restrictions on ability to deal with relevant UK land interests

In England and Wales, the relevant land interests are freeholds and leaseholds granted for terms in excess of seven years. In Scotland, they are heritable interests and leases granted for terms in excess of 20 years (Qualifying Estates).

From 1 February 2023, Existing Overseas Owners will be precluded from transferring, leasing (for terms in excess of seven years in England and Wales, or 20 years in Scotland) and/or legally charging their Qualifying Estates, unless and until they are registered on the Register (it is not enough to show there is a pending application) or can show that the disposition falls within a statutory exception. An overseas entity making a disposition in breach of the restriction will be committing a criminal offence.

While the restriction only comes into force on 1 February 2023, it could also catch dispositions made before this date where the Land Registry/Land Register of Scotland application to register the same is lodged on or after this date (or where an application submitted before this date is subsequently cancelled and resubmitted after this date). As a result, it is becoming more common for counterparties to insist that an Existing Overseas Entity making a disposal of a Qualifying Estate is registered on the Register as a condition of completion of the relevant disposition.

• Criminal liability

An Existing Overseas Entity and its officers will be committing an offence if, by 31 January 2023, it has not made an application to register on the Register but continues to own relevant interests in UK land. Breach could result in a fine or imprisonment.

The process of registering on the Register involves a number of possibly time-consuming steps, such as having to serve information notices on beneficial owners and engaging a suitable third party to verify the information being submitted with the application. The closer we get to 31 January 2023, the less time Existing Overseas Entities have to organise their applications. Further, the volume of applications to Companies House (which maintains the Register) is likely to rise significantly as other overseas entities seek to meet the deadline – this could cause delays in processing applications.

As such, Existing Overseas Entities that have not already done so are strongly advised to start the registration process now, because time is running out.

Please note that for Overseas Entities with land interests in Scotland, registration of an Existing Overseas Owner in the Register will not remove any duty on the Existing Overseas Owner to register in the Register of Controlled Interests in Land (RCI).

For more information on the Register (including the property restrictions) and the application of the new rules, please see:

England and Wales:

UK Register of Overseas Entities – impact on English and Welsh real estate Interactive tool kit

The Register of Overseas Entities: English and Welsh property provisions now in force

Scotland:

The Register of Overseas Entities: Scottish property provisions now in force