9 February 2018
The government announced last month its intention to introduce the world’s first public register that will require overseas landlords purchasing UK properties to disclose who the ultimate owners of the properties are. The intended go live date of the register is early 2021 and it will apply to the acquisition of both UK residential and commercial properties.
The main intention of the register is to remove the opportunity to utilise offshore companies to launder funds generated via criminal activity by purchasing properties in the UK – and ultimately provide the government with transparency on overseas companies, therefore making it harder to use shell companies and complicated offshore holding structures to hide criminal proceeds. However, this means that all overseas investors who are interested in purchasing UK properties via offshore agencies will be unable to maintain their anonymity.
The register will be held at Companies House and will be publicly accessible, so from 2021 discretionary trusts and nominees details are also likely to be a matter of public record. Therefore, taxpayers should examine their holding structures now to ensure all affairs are in order before the register comes in to play.
All overseas landlords that own or purchase UK property will have to provide beneficial ownership information to Companies House and apply for a registration number. A restriction will then be placed on the title register for the property and the overseas landlord won’t be able to buy, sell, grant a change or create a long lease of the property until their registration number has been granted.
A draft bill is expected to be published this summer and introduced to parliament in summer 2019. Following legislation the register would go live by early 2021.
The government has planned a one year transitional period during which time overseas companies that currently own property have to comply with the register requirements.