UK Companies House issued, on 28 June, the new procedures for filing an annual Update Statement that are to be followed by all Overseas Entities (OEs) that are registered on the Register of Overseas Entities (ROE).
The Register of Overseas Entities (ROE)
The ROE was launched on 1 August 2022 to increase transparency in the ownership of overseas entities that own UK property – either a freehold interest or a leasehold interest of over seven years. There are currently over 28,000 OEs on the Register.
In-scope OEs are required to register with Companies House by providing details of their beneficial owners or managing officers. Once registered, Companies House issues an Overseas Entity ID number that must be supplied to the Land Registry if the OE transacts its UK property. OEs cannot buy, sell, transfer, lease, mortgage or charge property in the UK unless they have registered.
The ‘Update Statement’ process
All OEs on the Register are required to file an ‘Update Statement’ every year, which requires them to check and confirm that all the information about the OE on the register is still correct, and update anything that has changed.
An Update Statement must be filed even if nothing has changed.
When you need to file
All OEs on the Register are required to file an ‘Update Statement’ every year. The due date is within one year of the date on which the OE was registered, or within a year of the previous Update Statement. It can be found by searching for the entity on the Companies House register.
The Update Statement must be filed no later than 14 days after the due date. After this, the filing will be considered late and must be filed as soon as possible.
An Update Statement can only cover 12 months. If an OE needs to cover more than 12 months, it will need to file another Update Statement.
It is a criminal offence not to file an Update Statement, potentially leading to prosecution or a financial penalty (of up to £50,000). The Overseas Entity ID Number will also become invalid until an OE’s record is brought up to date and the Update Statement is filed. Without a valid ID Number, OEs cannot buy, sell, transfer, lease, mortgage or charge property in the UK.
What you need to file
OEs are required to review all the information that is shown on the ROE about the OE and its registrable Beneficial Owners and Managing Officers (or registrable persons involved in trusts). Any information that has changed must be updated and all the information must be correct as at the date of the Update Statement.
OEs must still file an Update Statement even if there have not been any changes to the OE and its registrable Beneficial Owners or Managing Officers during the update period. This confirms that the information on the register is correct. OEs may also be asked to re-enter home addresses for individual BOs and MOs.
Verification checks must be completed on any information that is changed, and on any new BOs and MOs that are added.
Verification checks must be completed by a UK-regulated agent no more than three months before the date of the Update Statement. The UK-regulated agent will need to provide an Agent Assurance Code and an OE Verification Checks Statement to confirm this has been done.
If no information has changed, there is no requirement to perform any verification checks.
A UK-regulated agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
Sovereign Corporate & Trustee Services Limited is a UK-regulated agent. It has been issued with an Agent Assurance Code that is required to authenticate a verification statement when an OE is registered or when an Update Statement is filed.
How to file an Update Statement
From the beginning of August 2023, OEs or their UK-regulated Agent can file their Update Statement online at Companies House, provided there are no trusts involved in the OE (and provided none of its registrable BOs and MOs have their personal information protected at Companies House or are awaiting the results of an application).
For most OEs, filing an Update Statement will be nowhere near as onerous as the initial registration process, but we would strongly recommend that anyone with an OE on the ROE should check now for the statement date on the Companies House register, so they know when they are required to file.
They should also request the Authorisation Code, check whether there have been any changes to the OE or its registrable BOs and MOs (or any registrable persons involved in trusts) during the update period that will need to be verified by a UK-regulated agent.
BOs and MOs have one month to respond to information notices and, where verification is needed, it must be performed within a three-month window before the date of the Update Statement. These timings should be considered to avoid delays in filing the Update Statement.