Further to our previous alert (Will 2022 be the year that the Registration of Overseas Entities Bill finally becomes law?) the UK government has now introduced to Parliament the Economic Crime (Transparency and Enforcement) Bill.

While the Bill contains a number of measures designed to tackle "dirty money" in the UK property market (such as the strengthening of powers around Unexplained Wealth Orders), it is the proposals for a public register of the beneficial owners of overseas entities that own land in the UK which will be of significance to all legitimate overseas investors. It is estimated that approximately £170 billion of UK property is held overseas, meaning the Bill will impact a vast number of investors.

The proposed register would not just apply to future acquisitions of interests in UK land, but also to any overseas owner that owns land (a) in England and Wales which was acquired since 1 January 1999 and (b) in Scotland which was acquired since 2014. Failure to comply would result in restrictions on the ability to dispose of the relevant property and breach of the rules could amount to a criminal offence punishable by up to five years in jail. The register will be held by Companies House, in respect of which a White Paper published on 28 February 2022 set out plans to upgrade, including enhanced checks on identification of those involved in setting up, running, owning or controlling a company in the UK.

Until the proposed register comes into force, overseas entities with interests in Scottish real estate will still need to disclose those who hold a significant interest or control in their decision-making in the similar but distinct Scottish Register of Persons Holding Controlled Interests in Land which is due to come into force on 1 April 2022.

It remains to be seen when the proposed UK register will come into force.  However, the Bill represents a significant step forward in the UK government's plans to increase transparency around the ownership of UK property and one that we will be monitoring closely over the forthcoming weeks.