A huge amount of property in the UK – especially commercial property and purpose-built buy-to-let properties such as student accommodation – is owned through the medium of overseas entities, usually in well-known tax havens. Such arrangements are also often accompanied with relatively high levels of service charges which have the effect of making the UK tax yield quite low.
Under such arrangements, the beneficial owners of the property are not public knowledge. There is also a widespread belief that such structures are used to ‘clean’ money derived from criminal activity and tax evasion.
In order to exercise some control over this, a Bill is passing through Parliament which will make it necessary for the beneficial owners of land registered at the Land Registry to be disclosed.
Failing to comply will be a criminal offence (punishable by fines and/or imprisonment) and there will be restrictions on the use or sale of land of which the beneficial ownership is unknown.
The legislation is expected to come into force in 2021.
For more information please contact Tim Read in our Commercial Property Department