{"id":14005,"date":"2024-01-25T20:01:47","date_gmt":"2024-01-25T20:01:47","guid":{"rendered":"https:\/\/www.taxpolicy.org.uk\/?p=13988"},"modified":"2024-01-26T16:17:29","modified_gmt":"2024-01-26T16:17:29","slug":"overseas","status":"publish","type":"post","link":"https:\/\/heacham.neidles.com\/2024\/01\/25\/overseas\/","title":{"rendered":"Interactive map of all foreign entities holding English\/Welsh real estate (v2)"},"content":{"rendered":"\n<p class=\"\">Since the start of 2023, all overseas entities<sup class=\"modern-footnotes-footnote \" data-mfn=\"1\" data-mfn-post-scope=\"0000000000002f4e0000000000000000_14005\"><a href=\"javascript:void(0)\"  role=\"button\" aria-pressed=\"false\" aria-describedby=\"mfn-content-0000000000002f4e0000000000000000_14005-1\">1<\/a><\/sup><span id=\"mfn-content-0000000000002f4e0000000000000000_14005-1\" role=\"tooltip\" class=\"modern-footnotes-footnote__note\" tabindex=\"0\" data-mfn=\"1\">Meaning companies and other bodies with legal personality, such as foundations, LLPs and some foreign partnerships. This includes where they are acting as trustees<\/span> have had to be registered with the land registry and on Companies House &#8211; the &#8220;<a href=\"https:\/\/www.gov.uk\/government\/collections\/register-of-overseas-entities\">register of overseas entities<\/a>&#8220;.<\/p>\n\n\n\n<p class=\"\">We&#8217;ve created a interactive map that lets you see all property held by foreign entities.<sup class=\"modern-footnotes-footnote \" data-mfn=\"2\" data-mfn-post-scope=\"0000000000002f4e0000000000000000_14005\"><a href=\"javascript:void(0)\"  role=\"button\" aria-pressed=\"false\" aria-describedby=\"mfn-content-0000000000002f4e0000000000000000_14005-2\">2<\/a><\/sup><span id=\"mfn-content-0000000000002f4e0000000000000000_14005-2\" role=\"tooltip\" class=\"modern-footnotes-footnote__note\" tabindex=\"0\" data-mfn=\"2\">This is the second version with three improvements. First, it attempts to link straight through to the Companies House registered beneficial owners (saving you at least two clicks of the mouse each time). Second, it attempts to locate properties with no postcode. Third, it adds a date for when the registered proprietor&#8217;s details were updated<\/span> It&#8217;s very large (about 93MB), so people with slow or expensive connections may want to click away now.<\/p>\n\n\n\n<p class=\"\">If you click on a property you can see its land registry details (which you can then <a href=\"https:\/\/search-property-information.service.gov.uk\/search\/search-by-title-number\">look up here<\/a>). You&#8217;ll also see the name of the foreign entity &#8211; clicking on that takes you to Companies House and (if there&#8217;s one clear match for the company name) straight to the registered beneficial owners of the company.<sup class=\"modern-footnotes-footnote \" data-mfn=\"3\" data-mfn-post-scope=\"0000000000002f4e0000000000000000_14005\"><a href=\"javascript:void(0)\"  role=\"button\" aria-pressed=\"false\" aria-describedby=\"mfn-content-0000000000002f4e0000000000000000_14005-3\">3<\/a><\/sup><span id=\"mfn-content-0000000000002f4e0000000000000000_14005-3\" role=\"tooltip\" class=\"modern-footnotes-footnote__note\" tabindex=\"0\" data-mfn=\"3\">Sometimes there won&#8217;t be a clear match &#8211; perhaps different spelling of &#8220;Limited&#8221;; perhaps there will also be a UK company with the same name as a foreign company &#8211; you will then need to select the correct company, then click on &#8220;people&#8221; and &#8220;beneficial owners&#8221; to see who the registered beneficial owner is. Sometimes there will be multiple foreign companies from different countries; you may then need to look at the register itself to see which one is relevant.<\/span> Please see below for notes on using the map, and what it does and doesn&#8217;t reveal. <\/p>\n\n\n\n<p class=\"\"><strong>Please don&#8217;t jump to assumptions about tax evasion\/avoidance\/illegality without reading the notes below.<\/strong><\/p>\n\n\n\n<iframe src=\"https:\/\/storage.googleapis.com\/tpal_large_files\/overseas_2.html\" width=\"100%\" height=\"1500\"><\/iframe>\n\n\n\n<p class=\"\">It&#8217;s important to note that there is nothing inherently suspicious about a foreign entity holding UK real estate. For example, if you zoom into Canary Wharf, you&#8217;ll see JPMorgan&#8217;s UK headquarters, which is held (unsurprisingly) by JPMorgan. If a foreign person is investing in UK real estate then it is only natural it holds through a foreign company, and UK tax rules will now tax it in <a href=\"https:\/\/www.gov.uk\/guidance\/paying-corporation-tax-if-youre-a-non-resident-company-landlord\">broadly the same manner<\/a> as a UK company &#8211; so there is no avoidance here.<sup class=\"modern-footnotes-footnote \" data-mfn=\"4\" data-mfn-post-scope=\"0000000000002f4e0000000000000000_14005\"><a href=\"javascript:void(0)\"  role=\"button\" aria-pressed=\"false\" aria-describedby=\"mfn-content-0000000000002f4e0000000000000000_14005-4\">4<\/a><\/sup><span id=\"mfn-content-0000000000002f4e0000000000000000_14005-4\" role=\"tooltip\" class=\"modern-footnotes-footnote__note\" tabindex=\"0\" data-mfn=\"4\">The position used to be different. Foreign companies holding UK real estate have always been subject to UK tax on their rental income, but gains used to be exempt. That changed in 2015 for residential real estate and in 2017 for non-residential real estate. There also used to be an inheritance tax benefit for non-domiciled individuals of holding UK real estate through a foreign company; that went in 2017. <a href=\"https:\/\/www.gov.uk\/government\/publications\/register-of-overseas-entities-tax-implications\/tax-implications-of-the-register-of-overseas-entities\">There is a brief summary of some of these issues here<\/a>. It is therefore often the case that UK land is held offshore for historic tax avoidance reasons that no longer apply, but extracting the land from the current entity owning it is more cost\/hassle than it&#8217;s worth.<\/span><\/p>\n\n\n\n<p class=\"\">Some people have presented the raw numbers of overseas real estate holders as some kind of problem &#8211; that is in our view wrong and misleading.<\/p>\n\n\n\n<p class=\"\">There are, however, some things that in our view are suspicious and potentially unlawful:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\">A missing beneficial owner entry may indicate a breach of the rules. It will sometimes be appropriate to certify there is no beneficial owner, for example where no one person has a 25% holding or control\/influence.   <\/li>\n\n\n\n<li class=\"\">The registered beneficial owners should be individuals, with exceptions for governments, listed companies (like JPMorgan), <a href=\"https:\/\/www.legislation.gov.uk\/uksi\/2022\/870\/part\/4\/made\">regulated providers of trust services<\/a>, and companies which themselves list the beneficial owner. If you see any other kind of company listed (<a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/company\/OE016923\/persons-with-significant-control\">like this Barrowman-linked example<\/a>) then that may be a breach of the rules.<\/li>\n\n\n\n<li class=\"\">You will sometimes see a company listing its beneficial owners as trust entity, with no other person listed &#8211; <a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/company\/OE000324\/persons-with-significant-control\">here&#8217;s another Barrowman-linked example<\/a>. In our view this will sometimes be unlawful, particularly where the company is closely held. The trust entity will often have an individual (such as Barrowman) who exerts influence and\/or de facto control over it; that individual should be listed as a beneficial owner on the basis they are a &#8220;<a href=\"https:\/\/www.gov.uk\/government\/publications\/economic-crime-transparency-and-enforcement-bill-2022-overarching-documents\/factsheet-the-register-of-overseas-entities-web-accessible#:~:text=significant%20influence\">person with significant influence<\/a>&#8220;. However there appears to be widespread disregard of this rule.<\/li>\n<\/ul>\n\n\n\n<p class=\"\">It is, on the other hand, perfectly lawful to hold UK real estate through a foreign company with the aim of saving stamp duty land tax. Selling UK real estate directly triggers stamp duty at up to 15% (for residential property) and 5% (non-residential), but selling a company holding UK real estate does not. We have proposed <a href=\"https:\/\/heacham.neidles.com\/2022\/10\/25\/sdlt_1bn\/\">closing this &#8220;loophole&#8221; for non-residential properties<\/a>, and looking again at <a href=\"https:\/\/heacham.neidles.com\/2022\/11\/04\/ated\/\">how the rules apply to residential property<\/a>. We put &#8220;loophole&#8221; in scare quotes because it&#8217;s a practice that HMRC and successive Governments have known about for decades, and which current legislation permits.<\/p>\n\n\n\n<p class=\"\">Some notes:<\/p>\n\n\n\n<ul class=\"\">\n<li class=\"\">We are certainly not the <a href=\"https:\/\/www.private-eye.co.uk\/registry\">first to create a map<\/a> like this, but we believe this has the most up-to-date data and is the easiest to use. It is also, most importantly, pretty.<\/li>\n\n\n\n<li class=\"\">The map locates properties by postcode, and therefore there will be inaccuracies in the presented location, particularly in rural areas. Where there is no valid postcode (110 properties) or no postcode at all (21,939), we&#8217;ve attempted to roughly locate the address by putting a black mark in the geometric centre of the district that they are in. Anything more accurate would probably require someone going through by hand, and\/or cross-referencing via the land-registry. A simple manual land registry lookup will reveal the exact location (but will cost you \u00a33).<\/li>\n\n\n\n<li class=\"\">The price shown will not always be the price for that particular property &#8211; simultaneous purchases of multiple properties will often (perfectly properly) be registered showing the total price for all the properties. There are also ways to hide the true purchase price from the land registry (some of which are lawful; others less so).<\/li>\n\n\n\n<li class=\"\">There are <a href=\"https:\/\/warwick.ac.uk\/fac\/soc\/economics\/research\/centres\/cage\/manage\/publications\/wp680.2023.pdf\">certainly problems with the way the register of overseas entities works<\/a>; some are inherent in the design, but in our view lack of enforcement is the immediate problem.<\/li>\n\n\n\n<li class=\"\">One important &#8220;loophole&#8221; is that the register doesn&#8217;t show beneficial ownership of land, it shows beneficial ownership of the company holding land. One can therefore use a professional trustee to hide the true ownership. This <a href=\"https:\/\/www.litrg.org.uk\/tax-guides\/savers-property-owners-and-other-tax-issues\/introduction-trusts\/do-i-need-register-my\">should be registered with the HMRC trust registration service<\/a>, but the information will not be publicly available. That seems to us to be a significant problem, but it is unfortunately fundamental to the rules. However where the trustee is significantly influenced by an individual (for example because it is part of a family office and not a professional trust company) then in our view the individual should also be registered as a beneficial owner.<\/li>\n\n\n\n<li class=\"\">The 25% rule means that where for example, land is ultimately owned by a private equity firm, often no beneficial owner will be shown. That will in most cases be correct, because there are usually (much!) more than four investors in the private equity fund, and more than four individuals running the fund management. There are, for example, many retail chains and hotels owned by private equity funds. This is usually not tax avoidance.<\/li>\n\n\n\n<li class=\"\">The register doesn&#8217;t include Scottish properties &#8211; the <a href=\"https:\/\/www.ros.gov.uk\/data-and-statistics\/land-and-property-titles-by-country-of-origin\/country-of-origin-company-report#:~:text=Use%20this%20report%20to%20find,provided%20a%20non%2DUK%20address.\" target=\"_blank\" rel=\"noreferrer noopener\">Scottish equivalent<\/a> is only updated once a year, costs \u00a3300 to obtain, and comes with licensing restrictions. The 2023 update will be released in March, so there&#8217;s an opportunity for anyone interested to investigate this further. <\/li>\n\n\n\n<li class=\"\">The Scottish position is further complicated by the way Scottish land law works. There is a <a href=\"https:\/\/whoownsscotland.org.uk\/\">partial map of Scottish rural land ownership here<\/a>, but we&#8217;re not aware of any equivalent for urban areas.<\/li>\n\n\n\n<li class=\"\">We haven&#8217;t looked into the position for Northern Ireland, but it&#8217;s not included in the Land Registry dataset we used. <\/li>\n<\/ul>\n\n\n\n<p class=\"\">The bottom line remains: rules that are not <a href=\"https:\/\/www.gov.uk\/government\/publications\/economic-crime-transparency-and-enforcement-bill-2022-overarching-documents\/factsheet-the-register-of-overseas-entities-web-accessible#:~:text=If%20a%20foreign,major%20dissuasive%20effect.\">enforced<\/a> may as well not exist. Good actors will follow them, but <a href=\"https:\/\/www.gov.uk\/government\/news\/new-register-to-crack-down-on-dirty-money-and-corrupt-elites-in-uk-goes-live#:~:text=The%20Register%20of%20Overseas%20Entities,secretive%20chains%20of%20shell%20companies.\">the people the rules are actually aimed at<\/a> will not.<\/p>\n\n\n\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"\">You are free to use the map for any purpose &#8211; if you find something interesting then we&#8217;d be grateful if you could credit us, but you don&#8217;t have to.<\/p>\n\n\n\n<p class=\"\">Full credit to the code that generated this map to M, who coded it in an amazingly short amount of time. The html is his copyright, and posted on this website with his kind permission. Anyone wanting permission to use it should contact M via us. <\/p>\n\n\n\n<p class=\"\"><ul class=\"modern-footnotes-list \"><li><span>1<\/span><div>Meaning companies and other bodies with legal personality, such as foundations, LLPs and some foreign partnerships. This includes where they are acting as trustees<\/div><\/li><li><span>2<\/span><div>This is the second version with three improvements. First, it attempts to link straight through to the Companies House registered beneficial owners (saving you at least two clicks of the mouse each time). Second, it attempts to locate properties with no postcode. Third, it adds a date for when the registered proprietor&#8217;s details were updated<\/div><\/li><li><span>3<\/span><div>Sometimes there won&#8217;t be a clear match &#8211; perhaps different spelling of &#8220;Limited&#8221;; perhaps there will also be a UK company with the same name as a foreign company &#8211; you will then need to select the correct company, then click on &#8220;people&#8221; and &#8220;beneficial owners&#8221; to see who the registered beneficial owner is. Sometimes there will be multiple foreign companies from different countries; you may then need to look at the register itself to see which one is relevant.<\/div><\/li><li><span>4<\/span><div>The position used to be different. Foreign companies holding UK real estate have always been subject to UK tax on their rental income, but gains used to be exempt. That changed in 2015 for residential real estate and in 2017 for non-residential real estate. There also used to be an inheritance tax benefit for non-domiciled individuals of holding UK real estate through a foreign company; that went in 2017. <a href=\"https:\/\/www.gov.uk\/government\/publications\/register-of-overseas-entities-tax-implications\/tax-implications-of-the-register-of-overseas-entities\">There is a brief summary of some of these issues here<\/a>. It is therefore often the case that UK land is held offshore for historic tax avoidance reasons that no longer apply, but extracting the land from the current entity owning it is more cost\/hassle than it&#8217;s worth.<\/div><\/li><\/ul><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Since the start of 2023, all overseas entities have had to be registered with the land registry and on Companies House &#8211; the &#8220;register of overseas entities&#8220;. We&#8217;ve created a interactive map that lets you see all property held by foreign entities. It&#8217;s very large (about 93MB), so people with slow or expensive connections may [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14009,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[227],"tags":[103,230],"jetpack_featured_media_url":"https:\/\/heacham.neidles.com\/wp-content\/uploads\/2024\/01\/Screenshot-2024-01-20-at-10.04.22-1.png","_links":{"self":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts\/14005"}],"collection":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/comments?post=14005"}],"version-history":[{"count":5,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts\/14005\/revisions"}],"predecessor-version":[{"id":14245,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/posts\/14005\/revisions\/14245"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/media\/14009"}],"wp:attachment":[{"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/media?parent=14005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/categories?post=14005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/heacham.neidles.com\/wp-json\/wp\/v2\/tags?post=14005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}