The UK has become one of the most popular destinations for foreign investment in real estate over recent years. Such investment has significant benefits to the economy and provides many jobs for the construction industry. When overseas companies invest in the UK this gives concern for potential illegal activity to take place. This concern has been voiced by the UK government and has led to the proposed introduction of a beneficial ownership register.
The UK government seek to have clear corporate transparency in order that properties which are owned through overseas companies do not do this in order to obscure their true ownership. Companies who seek to obscure their true ownership make it difficult for regulators, legitimate businesses and the general public to have confidence in the UK market. Recent reports have indicated that between 2004 to 2014, over £180m worth of UK property has been investigated as suspected proceeds of corruption.
In May this year, the government completed a consultation in relation to property ownership by overseas companies and legal entities, and are considering the creation of a beneficial ownership register.
This consultation sets out the proposals in which the government would create a register of overseas companies that own UK property to capture the real beneficial owners of the properties.
This consultation will affect the following:
- Overseas legal entities which own UK property
- Overseas legal entities considering purchasing UK property
- Professional advisers and service providers to overseas legal entities
- Estate agents
- Civil society and transparency campaigners
Additionally, the government have commented that they are aiming to create this register to not only discourage criminals from laundering money via UK property, but to support a better functioning property market. This would increase investor confidence and aid Tenants in identifying who their actual landlords are.
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