What are the new requirements?
The ECCTA builds upon the measures already introduced by the Economic Crime (Transparency and Enforcement) Act 2022, a key component of which was the new Register of Overseas Entities whereby, from 1 August 2022, overseas entities were required to:
- register with Companies House
- update the register on an annual basis
- provide greater transparency over their beneficial ownership where transacting with property or land in the UK
Obligation to provide Property Information
Overseas entities are now obliged to disclose the title numbers of all qualifying UK estates they own, with this information verified by a UK regulated agent.
Obligation to Provide Principal Office Address Information
Overseas entities now need to provide details of their "principal office" rather than the registered office and update the information on the register to include details of their principal office, in cases where this information has not been provided to Companies House.
Expansion of requirement for Trust Information
The information required for trusts has been expanded. Registrable beneficial owners of settlors or grantors must now be disclosed and trustees and trusts are now always disclosable. The scope of who qualifies as a ‘registrable beneficial owner’ of an overseas entity has been extended so that where an overseas entity holds qualifying UK property as a nominee for another person, that other person (or if that other person is a legal entity, the beneficial owner of it) will qualify as a ‘registrable beneficial owner’ of the overseas entity and will need to be disclosed on the register.
Registration of Information for Managing Officers under 16
Managing officers under 16 must provide the name and contact details of an individual aged 16 or older willing to be contacted about the managing officer. Overseas entities will need to check the position with managing offices and ensure compliance with the new disclosure requirements for any officers under 16 .
When do they take effect?
There is not currently a timetable for when these changes are likely to come into effect, but it is expected that it will likely be in the early part of 2024. It is probable that the requirement for overseas entities to disclose further information on trusts, property, managing officers etc, will form part of their already existing duty to update the register of overseas entities.
What are the consequences of not complying?
For the purposes of the Register of Overseas Entities, the definition of "registered overseas entity" will be amended in such a way that if an overseas entity fails to respond to any requests for information from the Registrar it will not be treated as an overseas entity until it remedies any such failure and as a result will not be able to make a relevant disposition of UK property.
Overseas entities will therefore need to have their registration with Companies House up to date and have complied with any request for information from Companies House to deal with UK property.
What can I do to prepare?
Overseas entities should be looking to prepare now by reviewing all the information relating their UK owned properties, including checking any information already provided to Companies House. Any review should include looking at the information for property ownership, address information, managing officer information and trust information. Where necessary, this information should be updated and maintained so far as possible, ready for submission when needed.
Overseas entities will also need to fully understand and review their corporate structure, to ensure compliance with the trust disclosure obligations.