The new Economic Crime and Corporate Transparency Act 2023 (ECCTA) which received Royal Assent in October 2023 has made amendments to the previously introduced Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA).

The ECTEA introduced in August 2022 the Register of Overseas Entities whereby foreign entities that hold interests in residential land and property here in the UK must register their company and beneficial owners with Companies House. This register brought in a great administrative burden for many companies and the new ECCTA seeks to further increase the compliance requirements of the register.

WHAT ARE THE NEW CHANGES BROUGHT IN?

The type of information provided will change and includes the following:

  • Corporate owners will have to disclose their principal office in place of the registered office.
  • Entities will have to disclose title numbers of property held which needs to be verified by an agent. Previously entities did not have to provide details of the individual properties held but will now have to supply each title number.
  • In instances where the settlor of a trust was a company, the registrable beneficial owner of the settlor will need to be disclosed. Previously this did not have to be done and this change will increase the transparency of the structures.
  • Trustees and trusts are now always disclosable. Previously corporate trustees were only considered registerable beneficial owners if they were subject to their own disclosure requirements. This change will increase the number of trustees registered.
  • Entities that previously did not qualify as a registerable beneficial owner as they only held an interest in the estate as a nominee, would now be considered a registerable beneficial owner.

In conclusion, the ECCTA is a significant step towards further ensuring transparency in the UK property market. The act requires overseas entities to register with Companies House and disclose their beneficial owners or managing officers if they want to buy, sell or transfer property or land in the UK. Whilst this act has introduced more compliance for overseas entities, as of the date of writing, none of the provisions mentioned are in force and there is no published timeline for them coming into force.

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.