Impending Changes to the Register of Overseas Entities Increases Transparency… And Paperwork

The Register of Overseas Entities regime is undergoing a few changes, only 18 months after its introduction. The amendments are to be introduced by virtue of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) which, among its wide-ranging provisions which are now being rolled out, will further strengthen the current reporting requirements.

The aim is to build on existing powers to prevent and tackle abuses of UK corporate structures by overseas entities and increase corporate transparency. To date, more than 30,000 such entities are registered, according to Companies House. So what’s changing? Below are the headline amendments:

· Overseas entities will be required to provide a list of title numbers of all qualifying estates in land. (This must be verified by a UK-regulated agent.)

· If the overseas entity is the legal owner of at least one qualifying estate in the UK as a nominee for a person or other entity who is a beneficial owner, that person (beneficial owner) will qualify as a registerable beneficial owner. This extends the registration requirement beyond the legal owner to beneficial owners in these cases.

· Where trust property is involved, providing details of each trust beneficiary will be required; along with details of each corporate trustee beneficial owner in relation to the overseas entity; and specified details of any other interested person under the trust.

· Further, individuals or entities holding an interest in an overseas entity through a shareholding in the corporate trustee will be a registerable beneficial owner for the purposes of the ROE regime.

· There are also provisions governing where a trustee ceases to be a registerable beneficial owner

Overseas entities owning property in the UK should already be regularly reviewing their ownership structures, and the impending amendments means this has become even more important. They do, of course, have to file an annual update statement - even where no changes to the beneficial ownership have occurred.

But the new requirements will undoubtedly cause a headache and associated costs for some overseas entities and specialist advice should be taken ahead of the introduction of the provisions.

While the amendments will increase the reporting burden on overseas entities, there will be a three- month extension when the provisions are introduced, which will allow entities time to fulfil their additional reporting requirements.

If you would like us to cover an issue in the next NGM Tax Law Newsletter, we would be pleased to hear from you