As those who read my blog of last week looking at the details behind the PSC register, I predicted that the UK would introduce a beneficial ownership register of UK sited property in respect of foreign owners – and at the Anti-Corruption summit in London last week David Cameron made the following statement – “Any foreign company that wants to buy UK property or bid for central government contracts here will have to join a new public register of beneficial ownership information before they can do so.”
The implications of this are clear. We know the way in which the PSC register is already formulated and I predict (again) that we will see more of the same with this extension to what is essentially the same regime. Of course there are a many foreign investors who invested in UK property on the understanding that their identities would not be disclosed, and this position would now seem to be changing.
Those of us who advise foreign investors know that many of them value highly their privacy and would not welcome the disclosure of their identity. Whilst for many this is almost an admission of guilt in respect of a ‘tax crime’ often it is actually because the investor is nervous of third parties becoming aware of their private affairs – this could be for any number of reasons.
I do know that HM Government has been increasingly worried about the amount of corrupt funds that have found their way into the UK economy by virtue of high value property acquisitions in particular. There has been several attempts to slow down the pace of UK property acquisitions by hidden foreign investors, and eventually the pressure has told. In addition such a register will highlight those UK tax resident individuals who have been ‘round tripping’ – that is to say holding UK assets via offshore means without disclosing the associated income and gains in the UK.
Accountants and lawyers with foreign clients who will be affected by such a register now ought to begin discussing the matter with them so that any disclosure is not unexpected.
Rather than re-create a full article on the topic, I instead provide a link to a very nicely written article by the people at Withers.