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Lawyers warned on new British obligations
Law Society of England and Wales President I Stephanie Boyce

22 Jul 2022 / property Print

Lawyers warned on new British obligations

The Law Society of England and Wales has alerted lawyers to a new register of overseas entities (ROE) that will come into force on 1 August in Britain.

The solicitors’ body says that the new register will introduce new responsibilities and risks into some property transactions.

The ROE was created under the Economic Crime (Transparency and Enforcement) Act 2022.

Beneficial owners

Under the new rules, information must be provided about the beneficial owners to Companies House if practitioners are acting for overseas entities who:

  • Will be buying freehold or leasehold properties, or taking a new lease of properties that will need to be registered at HM Land Registry,
  • Already own properties registered at HM Land Registry, or
  • Have since 28 February 2022 sold, charged or leased property registered at HM Land Registry.

This information about beneficial owners will then be entered on the new register, and registration at HM Land Registry cannot take place until this has occurred.

The ROE also applies to those acting for British companies that are buying property from overseas entities.

Failure to comply with the new obligations is potentially a criminal offence both for the entity and its officers.

‘Caution’ urged on verification

Law Society of England and Wales President I Stephanie Boyce said that it was important that lawyers were aware of the new register, and their responsibilities, adding that parts of the Companies House registration process could be complex.

“Getting the information necessary to obtain registration in the ROE may prevent or delay application being made to HM Land Registry, with all the risks that this would entail,” she added.

Boyce pointed out that the verification requirements for the ROE were not the same as the procedures in place for complying with anti-money-laundering legislation, providing ID for lenders or for Land Registry.

“Solicitors are advised to exercise caution when assessing whether they are in a position to provide such verification,” she stated.

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