The Economic Crime and Corporate Transparency Bill
 
Upon its inception in 2016, the People with Significant Control (PSC) record by Companies House was intended by the government to be a measure against economic crime, while still maintaining the UK's appeal as an attractive investment destination for legitimate enterprises. 
 
The AML (Anti-Money Laundering) regulations, including those set by the Financial Action Task Force and Companies House, have seen a consistent evolution. 
 
The Register of Overseas Entities, overseen by Companies House, was recently implemented in the UK on 1 August 2022. This rule mandates that foreign individuals who own UK property anonymously must disclose their true identities, thereby establishing a worldwide benchmark for transparency. 
 
Foreign entities (consult with us to determine if this classification is applicable to you) seeking to purchase, sell, or transfer real estate or land in the United Kingdom are required to register with Companies House and disclose the identities of their registrable beneficial owners or managing officials. 
 
This provision also applies retroactively to foreign businesses who purchased real estate or land on or after the following date: 
 
The date of 1 January 1999 is significant in England and Wales. 
On December 8, 2014, in Scotland 
 
By 31 January 2023, these foreign entities were required to register with Companies House and disclose the identities of their registrable beneficial owners or managing officers. 
 
Foreign corporations are required to register any property or land they purchase in Northern Ireland on or after 1 August 2022. 
 
Currently, access to the information in the Register of Overseas Entities is limited to law enforcement and other pertinent governmental bodies. However, there are plans to modify this access in the near future, which we will elaborate on shortly. 
 
This is the inaugural global registry that provides information on foreign property ownership. Since its inception, it has garnered over 30,000 registrations. Like every new regulation, non-compliance with this one carries substantial consequences. 
 
The initial monetary sanctions were imposed on July 23rd, and Companies House is diligent in ensuring adherence to regulations. In addition to financial penalties, foreign firms who neglect to register will encounter challenges in selling, leasing, or placing a charge on their properties. 
 
The global authorities are becoming increasingly interconnected. 
 
Companies House is collaborating with international business registries and UK land registries to detect non-compliant organisations. Additionally, it is carefully cooperating with law enforcement partners to assist their investigations and, whenever feasible, offer vital intelligence. 
 
Additionally, it was declared that the US Treasury will initiate a Federal Beneficial Ownership registry on 1 January 2024. Companies House has been assisting their American counterparts by exchanging their knowledge and expertise in establishing the PSC registry. 
 
Although it is comforting to know that the information submitted to the register is currently accessible only to UK public servants and law enforcement, the control over companies will further develop due to the provisions of The Economic Crime and Corporate Transparency Act 2023. This act already empowers the Secretary of State to create regulations that allow access to data upon application, under specific circumstances that will be specified in the regulations... It is foreseeable that there will be cross-border sharing of information in the near future. Given the announcement that the US is following the same path as the UK, it is reasonable to believe that information sharing will occur shortly. 
 
Martin Swain, the Director of Intelligence and Law Enforcement Liaison at Companies House, expressed: 
 
“Reaching 30,000 registrations is a significant milestone but also a positive sign that the register is achieving its objective of enhancing transparency of ownership of land and property in the UK by foreign entities. 
 
Our focus remains on continuing to improve the register and rigorously enforcing compliance, so this transparency is maintained and enhanced yet further. 
 
We will continue to scrutinise information on the register and will be vigilant in targeting individuals who attempt to avoid transparency. We will also ensure that we are proactively supporting our law enforcement colleagues to disrupt the use of UK property to hide illicit wealth.” 
 
The government provided assistance for the accomplishments of Companies House and law enforcement, as acknowledged by the Minister for Enterprise, Markets and Small Business, Kevin Hollinrake. 
 
“The Register for Overseas Entities is imperative in ensuring we weed out kleptocrats and oligarchs buying up British properties under false names and has already helped identify absent landlords so that they can be held to account. 
 
There is no place for fraud and other illegal activities in our society, so it is fantastic to see we’ve now had 30,000 registrations on the register, helping us to protect our citizens, business owners and bring criminals operating in the UK to justice.” 
 
Our two firms, Property Tax Advice and Expat Tax Advice, have been providing guidance on these matters since the initial consultation was released. We have been assisting our international clients in achieving compliance. 
 
If you have any difficulties or concerns regarding this topic, please don't hesitate to contact us at mark@expat-tax-advice.co.uk
Tagged as: HMRC, non-UK resident
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