Under the rules set out in the ECTEA, an overseas entity which acquires, sells or transfers UK property will need to register in advance at Companies House before applying to register its land interest with the Land Registry. This will come into force on 5 September 2022 as companies or LLP’s incorporated in Jersey, Guernsey and the Isle of Man are all classified as overseas entities as they so will be subject to the ECTEA.
The requirement to register at Companies House also applies to overseas entities which currently hold land in England or Wales which was purchased on or after 1 January 1999. These entities will have until 31 January 2023 to register.
There are penalties for those who do not comply with the rules under the ECTEA. Not only will, the overseas entity be unable to obtain legal title to the land, its managing officers can face criminal sanctions, including fines of up to £500 per day or a prison sentence of up to 5 years.
It is important that overseas entities act as soon as possible to avoid sanctions and to be able to deal without restriction so it is imperative that they contact their advisers as soon as practically possible.