SCHEDULE 4AOverseas entities

Section 85A

1Meaning of “qualifying estate”

In this Schedule “qualifying estate” means—

a

a freehold estate in land, or

b

a leasehold estate in land granted for a term of more than seven years from the date of grant.

2Registration

No application may be made to register an overseas entity as the proprietor of a qualifying estate unless, at the time of the application, the entity—

a

is a registered overseas entity, or

b

is an exempt overseas entity.

3Restrictions on disposal

1

The registrar must enter a restriction in the register in relation to a qualifying estate if satisfied that—

a

an overseas entity is registered as the proprietor of the estate, and

b

the entity became registered as the proprietor in pursuance of an application made on or after 1 January 1999.

2

The restriction must prohibit the registration of any disposition within section 27(2)(a), (b)(i) or (f) unless—

a

the entity is a registered overseas entity, or is an exempt overseas entity, at the time of the disposition,

b

the disposition is made in pursuance of a statutory obligation or court order, or occurs by operation of law,

c

the disposition is made in pursuance of a contract made before the restriction is entered in the register,

d

the disposition is made in the exercise of a power of sale or leasing conferred on the proprietor of a registered charge or a receiver appointed by such a proprietor,

e

the Secretary of State gives consent under paragraph 5 to the registration of the disposition, or

f

the disposition is made by a specified insolvency practitioner in specified circumstances.

3

In sub-paragraph (2), in paragraph (f)—

• “specified circumstances” means circumstances specified in regulations made by the Secretary of State for the purposes of that paragraph;

• “specified insolvency practitioner” means an insolvency practitioner of a description specified in regulations made by the Secretary of State for the purposes of that paragraph.

4Registrable dispositions by overseas entity entitled to be registered (but not registered)

1

This paragraph applies where—

a

an overseas entity is entitled to be registered as the proprietor of a qualifying estate,

b

the overseas entity became entitled to be registered as the proprietor of that estate on or after the day on which this paragraph comes into force, and

c

the entity makes a registrable disposition within section 27(2)(a), (b)(i) or (f).

2

The disposition must not be registered unless—

a

the entity is a registered overseas entity, or is an exempt overseas entity, at the time of the disposition,

b

the disposition is made in pursuance of a statutory obligation or court order, or occurs by operation of law,

c

the disposition is made in pursuance of a contract made before the overseas entity became entitled to be registered,

d

the disposition is made in the exercise of a power of sale or leasing conferred on the proprietor of a registered charge or a receiver appointed by such a proprietor,

e

the Secretary of State gives consent under paragraph 5 to the registration of the disposition, or

f

the disposition is made by a specified insolvency practitioner in specified circumstances.

3

In sub-paragraph (2)(f) “specified circumstances” and “specified insolvency practitioner” have the meanings given by paragraph 3(3).

5Consent to registration of dispositions that cannot otherwise be registered

1

The Secretary of State may consent to the registration of a disposition that would otherwise be prohibited by a restriction entered under paragraph 3, or by paragraph 4, if satisfied—

a

that at the time of the disposition the person to whom it was made did not know, and could not reasonably have been expected to know, of the prohibition, and

b

that in all the circumstances it would be unjust for the disposition not to be registered.

2

The Secretary of State may by regulations make provision in connection with applications for consent, and the giving of consent, under sub-paragraph (1).

3

The regulations may, for example, make provision about—

a

who may apply;

b

evidence;

c

time limits.

6Making dispositions that cannot be registered

1

An overseas entity must not make a registrable disposition of a qualifying estate if, disregarding the possibility of consent under paragraph 5, the registration of the disposition is prohibited by—

a

a restriction entered under paragraph 3, or

b

paragraph 4.

2

If an overseas entity breaches sub-paragraph (1) an offence is committed by—

a

the entity, and

b

every officer of the entity who is in default.

3

Nothing in this paragraph affects the validity of a disposition made in breach of sub-paragraph (1).

4

Sections 1121 to 1123 of the Companies Act 2006 (liability of officers in default: interpretation etc.) apply for the purposes of this paragraph as they apply for the purposes of provisions of the Companies Acts.

5

In those sections as applied, a reference to an officer includes a person in accordance with whose directions or instructions the board of directors or equivalent management body of an overseas entity are accustomed to act.

6

A person is not to be regarded as falling within sub-paragraph (5) by reason only that the board of directors or equivalent management body acts on advice given by the person in a professional capacity.

7

A person guilty of an offence under this paragraph is liable—

a

on summary conviction, to imprisonment for a term not exceeding the maximum summary term for either-way offences or a fine (or both);

b

on conviction on indictment, to imprisonment for a term not exceeding 5 years or a fine (or both).

8

In sub-paragraph (7)(a) “the maximum summary term for either-way offences” means—

a

in relation to an offence committed before the time when paragraph 24(2) of Schedule 22 to the Sentencing Act 2020 comes into force, 6 months;

b

in relation to an offence committed after that time, 12 months.

9

Proceedings for an offence under this may only be brought by or with the consent the Secretary of State or the Director of Public Prosecutions.

Interpretation etc.

7

In this Schedule—

• “exempt overseas entity” means an overseas entity of a description specified in regulations under section 34(6) of the Economic Crime (Transparency and Enforcement) Act 2022;

• “overseas entity” has the meaning given by section 2 of the Economic Crime (Transparency and Enforcement) Act 2022;

• “qualifying estate” has the meaning given by paragraph 1;

• “register of overseas entities” means the register kept under section 3 of the Economic Crime (Transparency and Enforcement) Act 2022;

• “registered overseas entity” means an overseas entity that is registered in the register of overseas entities (but see paragraph 8).

8

1

For the purpose of this Schedule, an overseas entity that fails to comply with the duty in section 7 of the Economic Crime (Transparency and Enforcement) Act 2022 (updating duty) is not to be treated as being a “registered overseas entity” until it remedies the failure.

2

For the purpose of sub-paragraph (1), an overseas entity “remedies” the failure when it delivers the statements and information mentioned in section 7(1)(a), (b) and (c) of the 2022 Act.