The Department for Business, Energy and Industrial Strategy has published updated guidance for the registration and verification of information on the register of overseas entities under the Economic Crime Act 2022 (ECA).

The new register of overseas entities owning UK property, introduced by the ECA and operated by Companies House, came into effect on 1 August 2022. The ECA requires overseas entities that own, or have a lease of more than seven years over, land or property in the UK to be listed on the register at Companies House. If they fail to register, or to comply with the duty to update the information annually, this will affect, in most cases, the ability of the entity to sell or lease the land, or create a charge over it, as the other party would be unable to register the transaction with the Land Registry. The ECA also sets out various sanctions that could be imposed on the entity, including fines for directors if they fail to comply.

The transition period for overseas entities that were already the owners of UK property when the ECA came into force will soon end – they have until 31 January 2023 to submit their application for registration to Companies House. For more information on the regime in general, read our updated briefing, available here.

The updated guidance provides further clarification in relation to trusts, among other things, including:

  • “Significant influence or control” in relation to trusts – The guidance includes additional examples of when someone may have the right to exercise significant influence or control over a trust, such as having the ability to add or remove a beneficiary, deal with trust property, amend the trust deed or revoke the trust; and
  • Information to be provided to Companies House – Additional guidance is given about the information required to be submitted in relation to trusts, for example about beneficiaries (including where there is a class of beneficiaries), settlors, grantors and other interested parties (including ‘protectors', a common role in overseas trusts).

The updated guidance also notes that where verifiers verify information on the basis of documents or information obtained from a “reliable source” which is not independent of the person whose identity is being verified (as permitted in certain circumstances by amendments made to the ECA, with effect from 12 January 2023, by The Register of Overseas Entities (Verification and Provision of Information) (Amendment) Regulations 2022 (SI 2022/1389)), they must be able to justify their decision to do so if later challenged by Companies House.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.