On 1 August 2022, the new Register of Overseas Entities (ROE) created by the Economic Crime (Transparency and Enforcement) Act 2022 (Act) went live. Overseas entities that own or acquire relevant UK land interests¹ are required by the Act to register details of their beneficial owners on the ROE. Alongside criminal liability for non-compliance, there are detailed property provisions in the Act that restrict the ability of a non-compliant overseas entity to deal with land in the UK. Those property provisions come into force today, 5 September 2022, and mark a significant change in practice for all overseas entities.

From today:

• No overseas entity can apply to register itself as (a) owner of land or property or (b) tenant under a registrable lease (a lease more than 20 years in duration) in Scotland unless it can prove it is already registered in the ROE. Even if settlement of the transaction occurred prior to 5 September 2022, and the application to Registers of Scotland is lodged on or after this date, the overseas entity must be registered in the ROE. Any attempt to lodge such application to Registers of Scotland without the overseas entity being registered in the ROE will be rejected.
• If an overseas entity has a relevant interest in land in Scotland (i.e. land for which an overseas entity is registered as owner or tenant in a title sheet on or after 8 December 2014), it must be registered in the ROE at the time it delivers any disposition, lease, assignation of lease or security over that interest to another party, unless any of the statutory exceptions apply.² Breach amounts to a criminal offence, and Registers of Scotland would reject any application for registration of such deed in contravention of this provision.

If an overseas entity which was already registered as owner of a relevant interest in land prior to 1 August 2022 has no immediate plans to transact with that relevant interest in land, it will have up to and including 31 January 2023 to register in the ROE. However, failure to register in the ROE by 1 February 2023 will be a criminal offence.

All overseas entities that own a relevant interest in land (whether or not they became registered proprietor before or after 1 August 2022) must comply with the obligations in the Act to disclose to the Companies House Registrar on or before 31 January 2023 details of:

• any disposition, registrable lease (for more than 20 years), assignation of registrable lease or standard security (relevant deeds) over that interest made between 28 February 2022 and the date of its application to register in the ROE; and
• their beneficial ownership immediately prior to the relevant deed.

The overseas entity should include that information as part of their application to register in the ROE or, if it is not required to register in the ROE (for example, because it no longer had any UK land interests on 1 August 2022), as part of a standalone disclosure obligation pursuant to the Act.

For more information on how the ROE (including the property restrictions) applies to land or property in Scotland, please contact your usual Scottish Real Estate Dentons contact.

1. While the Register and Act apply across the UK, this note only considers the position for Scottish real estate. For the position in relation to English and Welsh real estate, please click here.
2. The statutory exceptions include (a) deeds granted in pursuance of a contract concluded prior to 5 September 2022 (b) deeds that need to be registered because of a statutory obligation, court order or other operation of law (c) deeds granted in pursuance of a power of sale or lease by creditor in a standard security registered on or after 8 December 2014 (d) deeds granted in pursuance of a community right to buy (e) deeds granted by specified insolvency practitioners in specified circumstances and (f) deeds to which the Scottish Ministers have given their consent for registration.