UK government announces major changes to property owned by overseas companies
The UK will lead the way by introducing a world-first public register of the ultimate owners of overseas companies that own or buy UK property, says accounting tax and advisory practice Blick Rothenberg.
The register of UK property ownership has been suggested for a number of years in an attempt to provide greater transparency of who actually owns the land in the UK. The introduction of a public register would be one of the most significant measures affecting UK property announced in recent years.
Nimesh Shah, partner at Blick Rothenberg, says: “The Government has never had an accurate understanding of who owns what. This lack of transparency has led to suggestions that UK property has been historically used as a mechanism for widespread tax evasion and money laundering. Whilst this may be the case in a minority of situations, there are very good reasons why someone (whether they live in the UK or abroad) do not want others to know they own a particular property.
“The main concern around the introduction of a public register will be privacy, which could result in possible threats to individuals’ families and homes.”
Following increased pressure, the Government will now set a timetable to introduce the register. The draft legislation for the register will be accelerated so that it is published this summer, and early estimations suggest that the system will be available by 2021.
Shah says: “The introduction of the register will be an enormous task for the Government, and likely involve a number of public sector bodies, such as the Land Registry and HM Revenue & Customs. The main challenge for the Government will be how they will gather the right data from the outset. The estimated introduction dale of 2021 seems hugely ambitious.
“So far, there are no details about the register and what data will be included. There are a number of key questions that need to be addressed before the draft legislation is published and the register goes live.
“The main concern will be exactly who will have access to the register – will it be limited to Government authorities or will it be a truly ‘public’ register (similar to UK Companies’ House, the public register of UK companies). If the latter, the Government has to be mindful of the potential security issues that this could give rise to.
“In recent years, the UK Government has introduced a raft of tax changes to UK property, in particular UK residential property, but new changes are currently being consulted on in relation to commercial property.
“The proposed introduction of a register of UK property ownership is likely to be one of the most significant changes to UK property, and its introduction must not be hasty because of the risks that could arise.”