The recently enacted UK Economic Crime (Transparency and Enforcement) Act of 2022 introduces new obligations for overseas entities dealing with UK property. The most salient requirement right now seems to be the compliance with the updating duty under the Act, as noted by the legal firm
Hogan Lovells.
Possession of UK property by overseas entities now necessitates regular updates to the UK’s Companies House. This involves providing current, accurate, and comprehensive details about the beneficial ownership of the property. This provision primarily aims to enhance transparency and curb illicit practices such as money laundering and fraud in the UK’s real estate market.
Investment funds that hold UK properties should also take note of these changes. It essentially means that any funds with overseas-registered, UK-based property need to comply with the new updating duties. This extends to the fund’s ultimate beneficial owners as well.
Overlooking these updated regulatory obligations could lead to severe penalties. In fact, failure to meet the updating duties could result in a restriction on selling or leasing the property until compliance is achieved.
Effectively, the UK Economic Crime Act of 2022 signifies a step towards increased transparency in real estate transactions. Legal professionals handling property portfolios for overseas clients should be proactive in understanding the Act’s implications and ensure compliance to avoid potential hurdles and penalties.