Tax & Register Of Overseas Entities In The UK

Overview of Register of Overseas of Entities (ROE)

What is its purpose?

The lack of transparency in the ownership of UK properties held by overseas vehicles such as offshore companies has long been a source of concern.

The ROE regime is being implemented by the UK government to ensure that anonymous foreign owners of UK property “reveal their identities” to Companies House and are held accountable for any UK tax obligations they owe.

Information on the register will be used to identify tax non-compliance of:

• overseas legal entities
• overseas legal arrangements
• beneficial owners (including settlers, beneficiaries, etc.)

Who is in scope?

An overseas entity that owns land in the UK, and has done so at the below timeframe is within the scope of the Register:

• In England and Wales, on or since 1 January 1999;
• In Scotland, on or since 8 December 2014; and
• In Northern Ireland, on or since 5 September 2022.

An overseas entity is defined as a company or organization with a legal personality that is governed by the laws of a country or territory other than the United Kingdom.

Following registration, the in-scope entity will be assigned a unique Overseas Entity ID (OE ID) to use when purchasing, selling, transferring, leasing, or charging UK property or land.

What is the deadline for registration?

In-scope overseas entities must complete registration by 31 January 2023.

For overseas entities wishing to purchase properties in the UK, registration is required before applying for ownership. If overseas entities do not obtain an Overseas Entity ID (OE ID) from Companies House, the relevant land registry will not accept the application to register the ownership of new purchasers.

What happens if you don’t comply?

If you are in scope and do not register with Companies House, all of your real estate assets in the UK will be frozen, which means you will be unable to sell or transfer them.

You could also face significant penalties such as £2500 fine or a prison sentence of up to 5 years.

To avoid problems, it is strongly advised that you complete registration on time.

Registration process of overseas entities

In-scope overseas entities need to apply online to Companies House, the process is as follows:

Step 1: Identification

You must provide information about your foreign entity, any registrable beneficial owners, and the UK-regulated agent who performed the verification checks.

If no beneficial owners can be identified, you may also be required to provide information about managing officers.

For full details of the information to be delivered, visit this site.

Step 2: Verification

Before submission, the information in your application must be independently verified by a “relevant person” in the United Kingdom.

Step 3: Submission

The application form, along with all relevant information, is submitted to Companies House by the UK Regulated Agent.

Step 4: Issuance of OE ID

After the verification step is complete an application is submitted to Companies House; the processing time is 2-3 working days, but it is expected to be longer as the deadline approaches due to increased applications.

If your application is approved, Companies House will issue you an OE ID as proof of registration.

Step 5: Annual confirmation

To notify Companies House of any changes or to confirm that the information is still correct, you must file an annual update.

Closing thoughts

The law is complex and this article only gives a simplified summary of the most important issues.

For registration and complete guidance on how to register your overseas entities, discover here.

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