What is the ROE?

The ROE is a UK wide register created through the Economic Crime (Transparency and Enforcement) Act 2022, administered by the Registrar of Companies for England and Wales.

A key aim of the legislation is to obtain and record details of property located anywhere in the UK held by overseas entities as well as to ascertain details of the beneficial owner(s) of such overseas entities.

It means that any overseas entity that wants to acquire, dispose or transfer land or take a registerable lease in the UK, or who already  owns or has a registerable lease of property, from certain dates, must register on the ROE. The legislation defines “overseas entity” widely and means a legal entity that is governed by  the law of a country or territory outside the UK.  A legal entity is also defined widely and means  a body corporate, partnership or other entity  that is a legal person under the law by which  it is governed. 

What do Guernsey entities need to do? 

As from 1 August 2022, a Guernsey entity that already owns property or occupies property under a registerable lease in the UK will have a six-month period to register, depending on where and when that land was acquired in the UK. In England and Wales if the land was acquired on or after 1 January 1999 then the entity must register on the ROE. In Scotland the relevant date is 8 December 2014 and in Northern Ireland the requirement to register only applies to land acquired on and after 1 August 2022.

A Guernsey entity that wishes to enter into a property transaction (such as a sale or purchase, granting security or entering a registrable lease) in the UK after 1 August 2022 must also register. 

The application for registration in the ROE includes information about the beneficial owner(s) of the overseas entity and requires  that certain verification checks are undertaken on such beneficial owner(s) before the entity  can be registered.

What are the implications of  non-compliance?

If a Guernsey entity, as a current owner or registered tenant, does not register with the ROE before the end of the transition period, on 31 January 2023, it may commit an offence under the new law, punishable by a fine or imprisonment of the officers of the entity concerned.

The legislation does not impose a duty on a prospective purchaser of land or registered tenant to register, as such, but a Guernsey entity will be unable to complete the registration of title in the conveyancing process unless it is registered (save for certain exemptions). The applicable land registry in the UK will  reject the application for registration if the contracting party to the transaction is an overseas entity, and it has not registered with  the ROE, when it ought to have done so.

The legislation has brought about a marked change for overseas property investment in the UK and means a Guernsey entity should exercise caution if contemplating a UK property transaction and be careful to ensure that it fully understands the requirements under the legislation so as to avoid any transactional delays or committing any offences under the new law.

The original version of this article was first published by Guernsey Property and Construction Magazine, September 2022.