If you own a property in England, you need to be aware of the new obligations that came into effect in 2023. The British government has decided to enhance transparency regarding the true ownership of properties located within its territory. Starting from January 31, 2023, all foreign companies that own or acquire a property in England will have to register with Companies House, the organization responsible for the UK’s register of trade and companies.
What is the objective of this measure?
The British government aims to combat money laundering, tax evasion, and corruption, which can be concealed behind shell companies or tax havens. According to a study by Transparency International, approximately 86,000 properties in England and Wales are believed to be owned by offshore companies. By compelling these companies to disclose their identity and beneficial ownership, the government hopes to deter illicit activities and facilitate legal investigations.
What are the registration requirements?
Registration with Companies House must be completed within 30 days of acquiring the property or from the effective date of the law for properties already owned. Companies must provide the following information:
Their name, their legal entity, address, and country of origin.
The name, date of birth, country of residence, and nationality of the beneficial owners, i.e., the individuals who directly or indirectly control more than 25% of the company’s share capital or voting rights or exert significant influence over it.
The nature and extent of control exercised by the beneficial owners.
The address and description of the property owned by the company.
Companies must also update this information at least once a year and report any changes within 14 days. The information provided is accessible to the public through a free online register.
What are the penalties for non-compliance?
Companies that fail to fulfill their registration obligations or provide false or incomplete information may face criminal penalties. They could also be subject to an unlimited fine of £2,500 per day and/or imprisonment for up to five years for responsible directors. Additionally, companies that are not registered with Companies House will be unable to sell, rent, or mortgage their property. The Land Registry will refuse to register any transactions involving an unregistered company.
What advice should be followed to comply with the law?
If you are affected by this new obligation and have not yet complied with the UK authorities, it is essential to promptly collect and verify the required information about your company and its beneficial owners. You must also ensure that this information is consistent with what you have already disclosed to tax authorities or other relevant organizations. If in doubt or facing difficulties, it is recommended you seek assistance from a qualified legal professional to guide you through the process. English property law is complex and governed by the principle of “caveat emptor,” which means that the buyer must investigate the characteristics and defects of the property themselves. A specialized lawyer can advise you on the legal, tax, and administrative aspects of your real estate transaction and help you fulfill your legal obligations. Once this information is gathered, you can register the company with the new Companies House register. If uncertain, do not hesitate to consult your accountant.
Conclusion
In conclusion, the new law on the registration of foreign companies owning properties in England aims to enhance transparency and combat financial crime. It requires affected property owners to declare their information to Companies House or risk severe penalties. It is crucial you comply with this obligation within the specified timeframe, and if necessary seek assistance from an expert.
Pour toutes questions, contactez Franck Sidon
Directeur Général – TaxAssist Accountants
francksidon@taxassist.co.uk
https://www.taxassist.co.uk/chiswick
