The Department for Business, Energy & Industrial Strategy (BEIS) has published a call for evidence on its proposals for the world’s first public beneficial ownership register of overseas entities holding UK properties, following on from the discussion document published in March 2016 (see http://bit.ly/2o9noyG).
The register is intended to increase transparency of overseas investments in UK property, and BEIS is seeking input from overseas investors, property and transparency experts on the design of the policy and evidence on the possible effects of the policy.
The proposals are made in a consultation launched on 5 April and recommend a register to be kept by Companies House operating on similar lines to the existing ‘people with significant control’ register for UK companies, and requiring similar disclosures. Overseas entities would not be able to buy or sell property in the UK unless they have provided the requisite information.
The consultation proposes that current owners would have a year from the introduction of the register to either disclose or sell the properties. Entities incorporated in other countries with equivalent publicly available registers will be exempt from registering in the UK. It is also proposed that criminal penalties may be introduced for non-compliance.
Sara Maccallum, senior partner and head of tax at Boodle Hatfield said: ‘There are a number of practical difficulties with the proposals which would need to be addressed, such as offering reassurances to banks who lend the funds for property transactions, ensuring there are adequate protections for beneficial owners to ensure their safety is not compromised, and to ensure the proposals could work across the whole UK.’
Maccallum adds: ‘It should also be noted that many prime residential property owners have extracted properties from corporate vehicles following the recent removal of the IHT benefits of holding property through offshore structures and increases in the annual tax on enveloped dwellings. Further new purchasers are increasingly less likely to use a corporate vehicle to hold residential property, so its impact may not be that severe, but only time will tell.’
The Department for Business, Energy & Industrial Strategy (BEIS) has published a call for evidence on its proposals for the world’s first public beneficial ownership register of overseas entities holding UK properties, following on from the discussion document published in March 2016 (see http://bit.ly/2o9noyG).
The register is intended to increase transparency of overseas investments in UK property, and BEIS is seeking input from overseas investors, property and transparency experts on the design of the policy and evidence on the possible effects of the policy.
The proposals are made in a consultation launched on 5 April and recommend a register to be kept by Companies House operating on similar lines to the existing ‘people with significant control’ register for UK companies, and requiring similar disclosures. Overseas entities would not be able to buy or sell property in the UK unless they have provided the requisite information.
The consultation proposes that current owners would have a year from the introduction of the register to either disclose or sell the properties. Entities incorporated in other countries with equivalent publicly available registers will be exempt from registering in the UK. It is also proposed that criminal penalties may be introduced for non-compliance.
Sara Maccallum, senior partner and head of tax at Boodle Hatfield said: ‘There are a number of practical difficulties with the proposals which would need to be addressed, such as offering reassurances to banks who lend the funds for property transactions, ensuring there are adequate protections for beneficial owners to ensure their safety is not compromised, and to ensure the proposals could work across the whole UK.’
Maccallum adds: ‘It should also be noted that many prime residential property owners have extracted properties from corporate vehicles following the recent removal of the IHT benefits of holding property through offshore structures and increases in the annual tax on enveloped dwellings. Further new purchasers are increasingly less likely to use a corporate vehicle to hold residential property, so its impact may not be that severe, but only time will tell.’
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