Register for foreign company ownership of UK property to crack down on money laundering
The UK continues the fight against money laundering with the introduction of a new register which will reveal the owners of overseas companies who own and buy UK property.
The UK's Department for Business, Energy & Industrial Strategy (BEIS) claims that, since 2004, property in the UK worth £180 million has been brought under criminal investigation as the suspected proceeds of corruption. As a result, a register revealing owners of foreign companies buying property in the UK will be published by early 2021. Jane Greenwood, Head of Global Personal Tax Advisory at Alliotts in London explains more.
The aim of the new register for foreign company ownership of UK property is to crack down on money laundering by foreign criminals.
The register will only cover property in England and Wales and draft laws should be published by summer 2018.
Requirements under the new laws
The public register will require foreign companies that own or buy property in the UK to provide details of their ultimate owners/beneficiaries. This will make it easier for law enforcement agencies to track criminal funds and take action against criminals who use shell companies to launder money by buying properties in London and other locations.
UK companies are already obligated to record details of their beneficial ownership by maintaining a register of people with significant control (PSC register). The PSC information is filed at Companies House and is publicly assessable. The planned new register for foreign company ownership of UK property is, accordign to Greenwood, "likely to operate on a similar basis, with an overseas company being provided with a unique identifier number (the same as a UK company number) that will enable it to acquire property in England and Wales. Currently, the only publicly available information is the name of the company and its territory of incorporation."
The register will remove the right to privacy, and follows various provisions introduced in recent years that reduce or remove any tax benefit for offshore structures or persons holding high value UK residential property.