United Kingdom: Economic Crime (Transparency and Enforcement) Act 2022 - Real estate implications for overseas entities

17 Mar 2022    1 minute read

In brief

The introduction of the Economic Crime (Transparency and Enforcement) Act 2022 has significant implications for overseas investors who own or acquire an interest in UK real estate, and will prevent registration of freehold or leasehold acquisitions and (following a transitional period) freehold or leasehold disposals and charges at the Land Registry if the overseas entity has not been registered at Companies House.

Contents

Key Takeaways 

  • The Economic Crime (Transparency and Enforcement) Act 2022 ("Act") passed into law on 15 March 2022. The commencement date for the Act's provisions is awaited.
  • The Act requires overseas owners or acquirers of a relevant interest in UK property to be registered at Companies House, and to disclose their beneficial owners.
  • A transitional period of 6 months will apply for overseas entities which already hold relevant UK real estate interests to complete their Companies House registration.
  • Dispositions by way of sale, lease or mortgage (after the transitional period) and acquisitions of freehold or leasehold interests in UK property by an overseas entity which has not registered itself at Companies House will not be capable of registration at the Land Registry.
  • The restrictions on land dispositions will apply retrospectively for property acquired since 1 January 1999 in England and Wales (8 December 2014 in Scotland).
  • Sanctions for failure to register, the provision of false information, failure to update registered information annually and to dispose of property in breach of the Act will include a fine (including a daily fine of up to GBP 2,500 for continued contravention) and/or a prison sentence.
  • Existing powers in the Proceeds of Crime Act 2002 will be strengthened to enable law enforcement agencies to investigate the origin of property and recover proceeds of crime.

 Click here to access the full alert.

Contact Information
Justin Salkeld
Partner
London
Read my Bio
Justin.Salkeld@bakermckenzie.com
Ben Farnell
Partner
London
Read my Bio
ben.farnell@bakermckenzie.com
Stefanie Price
Partner
London
Read my Bio
stefanie.price@bakermckenzie.com

Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.