If you are an investor currently using overseas entities to hold
UK property you should be aware that the UK Government is putting
together proposals for greater transparency of the beneficial
owners of UK properties owned by overseas entities.
The regulations will have implications for:
the risk management, timing and due
diligence in real estate investment transactions;
overseas entities who will need to
ensure compliance is planned well ahead of closing;
sellers and mortgagees who will also
need to ensure the overseas buyer has complied with the
existing overseas landowners who are
seeking to dispose of or grant a charge over their UK
How will the new register work?
The UK will be the first country to have such a register and if
these proposals are implemented we will see –
overseas entities being prohibited
from selling their existing properties or creating long leases or
charges over the property without compliance with the new
regulations. This will be enforced by automatic entries being added
to the Land Registry's title register; and
overseas entities buying property
facing the complete reversal of any transaction if they cannot
prove compliance at the time they register the land transfer or
lease with Land Registry.
The UK Government are working to fulfill the promise they made
at the International Anti-Corruption Summit in May 2016. We are in
a consultation period at the moment as they look to ascertain how
the proposals might influence those planning to invest in the UK
and any impact on the UK economy. Should you wish to have your say,
you only have until 15 May 2017 to submit your feedback. A link to
the response form is here.
We in the Reed Smith Real Estate group will continue to follow
and report on the development of these proposed regulations, so
watch this space.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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