Edward Burton argues that while a register of companies owning land in England and Wales helps transparency, it could also threaten personal security.
The government has recently closed its consultation on a register of beneficial ownership of all companies holding land in England and Wales.
Unlike the register of ‘persons with significant control’ (or PSC) register which relates to UK companies only – this proposed new register will apply to all companies, wherever incorporated, which own land in England and Wales and require disclosure of the ultimate beneficial owner(s) of the company. The company would need to be registered and have a unique identifying number before being allowed to purchase land in England and Wales although there may be exemptions for companies where such information is available in their home jurisdiction.
Greater transparency is a growing feature of the private wealth world with governments seeking more information in respect of the ultimate owners of such entities. The goal of such initiatives is laudable including ensuring further tax transparency and tackling money laundering and tax evasion – particularly as there is a perception that London property is particularly vulnerable to money laundering.
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It seems likely, in any event, that with the proposed changes to inheritance tax from 2017 and the ongoing imposition of the Annual Tax on Enveloped Dwellings, increasing numbers of properties will be removed from their corporate envelopes having initially been purchased into corporate entities for legitimate succession, confidentiality or tax planning reasons.
However, there are a number of issues arising from the consultation which need to be considered carefully. A number of property owners use corporate owners of residential property for security reasons, legitimately concerned that their addresses are not publically accessible. They will therefore be rightly concerned that the proposed new register will be publically accessible and not restricted to government agencies.
Even without specific security concerns it would be a brave individual who would want their address to be publically available.
In addition, the consultation does not appear to address any disclosure requirements relating to direct trust ownership of properties. Whatever is decided, it is important that the rules are clear.
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Whether or not this proposed new register comes to pass remains to be seen. However, there are certainly a number of issues that should be considered carefully before the final form of this is finally decided.
Edward Burton specialises in prime and super prime residential property at boutique private wealth law firm Maurice Turnor Gardner LLP.
