The UK Government has confirmed its intention to introduce a new public Register of UK Property Ownership.
This follows a number of recent changes relating to how UK residential property is taxed (see our blog on ATED and non-resident CGT here) and is another clear demonstration of the Government’s ongoing emphasis on increased transparency over offshore investment into the UK.
Here we answer a few questions arising from the announcement that the new Register is to be introduced:
What is the new public Register of Property Ownership?
This is a new publicly available Register designed to detail the ultimate beneficial owners of UK real estate.
When will it be introduced?
Draft legislation implementing the Register will be introduced in 2018 (summer), with the Register itself expected to be effective sometime during 2021.
What is the definition of ‘property’ for the purposes of the Register?
Any freehold interest and any leasehold interest of registerable duration, which can be as low as 7 years, over UK land and property.
What is the definition of ‘owner’ for the purposes of the Register?
Any individual with a greater than 25% interest in a legal entity holding UK property, or with the right to exercise significant influence or control over such a company is likely to be a beneficial owner.
The Register also applies to all “legal forms that can hold property”. This will include all companies and similar such structures and may also include entities such as unit trusts and LLPs.
Trusts are expected to be excluded, as may other entities that are already subject to beneficial ownership disclosure obligations.
Will ‘offshore’ individuals be affected?
Yes, along the same lines as the recently introduced UK Trust Register (see our blog HERE), non-UK or ‘offshore’ persons will be affected in the same way as UK owners.
What needs to be reported?
The information required by the Government will include:
- An individual’s name
- Date of birth
- Residential address and country of residence.
What happens once on the register?
Once registered, legal entities will have an obligation to maintain the information on a periodic basis. The Government initially proposed a reporting requirement for entities within scope every two years, however, this is being reconsidered and may change to an annual reporting requirement.
It is proposed that in future, the obligation to obtain and provide a registration number on acquisition will be a requirement in order to obtain legal title to land and property in the UK.
In summary, the new Register will be the first of its kind in the world and the disclosure obligations are significant. Although it will be a couple of years until implementation, now is the time to review your current tax position in relation to any UK property held in a structure. It also allows time to plan for any future investment and how best to set up the ownership.
To discuss your UK residential property needs, your current structure or to find out what your obligations may be in relation to the new Register please contact one of our tax experts: