Shakespeare Martineau LLP / Penningtons Manches Cooper LLP
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Yes. Foreigners can own and occupy real estate and can hold shares in property owning companies. There are no restrictions on foreigners owning or occupying real estate. The UK government has now established a public register of beneficial ownership of overseas legal entities that own or purchase property in the UK, or that participate in central government contracts. Overseas legal entities that fail to register necessary information about their beneficial owners will be prevented from dealing with UK property (buying, selling, granting a long lease and mortgaging it).
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
No. However, the UK Government maintains a list of individuals, organisations and governments that are subject to financial sanctions. Such individuals, organizations and governments would be subject to restrictions on lending and purchasing real estate.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
When buying it is usual to undertake conveyancing searches of the local authority, utility providers and property specific searches (such as mining). These are carried out before exchange of contracts and closing. There are also fees associated with estate agents, solicitors, valuation, surveys and professional advisors’ fees.
Value Added Tax (VAT) (a form of sales tax) may be payable on commercial real estate if the seller has waived the exemption to tax. VAT is not payable on residential real estate.
Stamp Duty Land Tax (SDLT) is payable by the purchaser when buying real estate. HM Land Registry Fees are payable for registering the purchase following closing. Higher rates of SDLT are payable by specified categories of buyer, including those who already own a property (even if outside the UK), companies and non-residents.
The amounts payable differs if the property is commercial, residential or a mixture of both.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner
Annual Tax on Enveloped Dwellings may be payable if the real estate is above a specified value (currently £500k) and is held by a company, a partnership with a corporate partner or a collective investment scheme. Business rates, designed to be paid by business occupiers are payable by property owners if the property is vacant.
Under the "non-resident landlords’ scheme", a tenant or letting agent may be required to deduct 20% tax, and account for this sum to HMRC, if the landlord (whether an individual, company or trust) is not resident in the UK.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so, what are they?
No, changes in tax legislation over the past decade have removed the exemptions and lower rates of tax for non-residents on both owning and selling UK real estate.
How is the ownership of Real Estate evidenced in your jurisdiction?
The ownership of real estate is evidenced by registration at HM Land Registry. This is a public register of titles and comprises over 80% of the land in England & Wales. Where the real estate is not registered, ownership is evidenced by possession of the title deeds.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
All documents referred to in HM Land Registry’s registers of title are subject to a general right of inspection. However, some documents or parts of them may contain prejudicial information and, upon application, can be designated exempt from public scrutiny.
Ownership of companies registered in England and Wales at Companies House is publicly available.