Nearly 40% of registered overseas companies which own UK property failed to meet the 31 January deadline to join the Register of Overseas Entities and declare their ultimate owners.
As of 1 February 2023, 12,930 of the 32,440 registered overseas companies had failed to comply, leaving them open to fines of £2,500 per day, a ban on selling their land and possible criminal sanctions for their officers.
The register was set up last August at Companies House, under the Economic Crime (Transparency and Enforcement) Act 2022.
Helen Curtis, corporate partner at Devonshires, said: ‘The register was introduced to disclose who actually owns British property.
‘The intention was to lay bare who is dodging their UK tax obligations. However, the failure to comply rate is shocking.
‘If the 12,930 companies who failed to comply by 31 Jan continued to not comply for the 28 days in February and were fined £2,500 per day, we’re looking at a total amount of £905,100,000– and growing daily.
‘There are more than 50,000 properties across England and Wales held by around 18,000 offshore companies. Of those 18,000 companies, 5,070 were so obtuse with the information they filed that the public still remains in the dark over who ultimately owns and benefits from them.’
In February, business minister Lord Callanan announced increased investigatory powers for Companies House and the Insolvency Service, and up to £20m investment to tackle money laundering by companies that own UK property.
Curtis said: ‘Historically, the UK has been a property hotspot for offshore companies and trusts as it has allowed for a high degree of secrecy for property owners who wish to remain anonymous. However, it has been exploited.’
