Estate and letting agents will soon need to help overseas buyers of UK properties navigate tougher checks.
At the start of this month, the government launched the new Register of Overseas Entities to reveal the identities of foreign owners of UK property. Previously, overseas buyers could remain anonymous by purchasing UK properties through companies, but foreign companies will now have to name any individual with “significant influence or control” over them – for example, owning 25% or more of its shares. Similar rules already exist for UK-based buyers.
Companies that do not register can be fined and their managing officers jailed, and non-compliant overseas entities will also face restrictions on selling or leasing their UK land.
The rules will not just apply to new purchases, but also retrospectively. Overseas buyers of properties in England and Wales from as far back as January 1999 will have to register, while in Scotland the registration requirement will go back to December 2014. In Northern Ireland, the rules will only apply to future transactions. Existing owners have six months to register.
In order to register, overseas buyers will need to find a UK-supervised “relevant person”, which includes estate and letting agents supervised by HMRC under the Money Laundering Regulations. The government has published guidance on registering and verifying the details of overseas entities, and estate agents working with foreign buyers may wish to do this as a matter of course during the buying process. As the rules are retrospective, letting agencies may also want to contact any overseas entities that they work with to ensure that they are aware of the new rules.
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