Registration of Property Owned by Foreign Entities
Under draft legislation now in Parliament (the Registration of Overseas Entities Bill), the Government is intending to establish a register of the beneficial ownership of properties in the UK where the property is owned by an overseas entity. The general intent is to clamp down on money laundering, as it is considered that many such investments are made with funds derived from criminal activity.
Where such disclosure is not made, the officers of the entity will be subject to criminal sanctions including fines and imprisonment and there will be restrictions on the ability of the property to be sold, let or used as security for a loan.
The register is expected to come into effect in 2020 and will be similar to that which already applies where properties are owned by UK residents.
Officers of the property-owning foreign entity will be required to confirm the details of the beneficial ownership annually.
The legislation will have significant implications for anyone who is buying or letting a property from or intending to sell or let to an overseas entity, or entering into a financial transaction which will result in a charge over such a property.