A London estate agent who works closely with High Net Worth overseas buyers has hit out a proposed law which he describes as “a new obstacle” in the market.
The government’s new Registration of Overseas Entities Bill sets out provisions to establish a new beneficial ownership register of overseas entities that own UK property.
This follows a commitment made by the government at the Anti-Corruption Summit in 2016 to establish such a register, in order to combat money laundering and achieve greater transparency in the UK property market.
The Bill is currently out for comments from agents and other interested groups before a revised version is likely to be presented to Parliament next year.
Now Trevor Abrahmsohn of Glentree Estates says that whilst there was at one time a case for cleaning up the processes used by some overseas buyers, this latest piece of red tape may be a step too far.
“Out there in the real world with stamp duty at dizzy levels, very undesirable changes to UK Non Dom Residency in this country at its draconian best, with the uncertainty of the Brexit shadow, the last thing we should be doing at the moment, is introducing more red tape” he cautions.
“International residential property buyers are facing a 15% transaction charge by way of SDLT or, they could purchase a property in a corporation and pay an ATED, the equivalent to a Mansion Tax, but if this is not enough to ‘put them off’ they are being ‘trussed up’ with the Non Dom Residency arrangements and now, they meet this new obstacle of the Overseas Entity Bill” says Abrahmsohn in his latest blog.
“Given that we need positive inflows of capital into this country, now more so than ever before in the post Brexit era, how many hurdles are we going to construct before the international investor gets tired of all this regulation and moves on to other parts of Europe who would welcome them with ‘open arms’?”
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So Mr Abrahmsohn's argument is: "we should let foreign criminals launder money through London property because: a) it helps his business and b) otherwise they will do it somewhere else. Not a great argument is it?
If a buyer or owner is clean, then what's the problem. Disclose, be open. The issue is the off shore trusts - Caymans, Panama, Monaco and 'colleagues' that cause us the issues with AML. This goes a step forward in a positive way.
James Walsh, you are at it again. Can you ever say anything positive about Estate Agency in the UK.
Do you all remember Grant Shapps when the Conservatives came to power in 2010, they were going to reduce red tape and bureaucracy enabling business to thrive, employ more people, make more profits and then pay more tax. But the exact opposite has happened. Trevor Abrahmsohn is just trying to protect his corner form the huge raft of legislation that seems to come through weekly. Coupled with George Osbournes crazy increases in SDLT, those in property are now fighting their battle with one hand tied behind their backs. The UK propertry market is one of the biggest drivers of the economy and is being hit frequently. And those with money of course will go elsewhere when other countries offer favourable conditions.
I've never seen so many James' commenting at one time before. I feel like I've ruined the James-only party. You don't have to be called James to comment, but it helps!
Anyway, I happen to agree with both viewpoints. There needs to be a balanced approach - not a free-for-all, but not denying clean, legitimate buyers either.
Another James with an opinion!
Balzac said that : "Behind every great fortune there lies a great crime." And currently the super rich rather like the UK and with a national debt, which incidentally has rocketed from £500 billion in 2008 to £1.8 trillion today, can we really afford to jog all our Oligarchs and Cleptocrats off to other countries willing to turn a blind eye to how they amassed their fortunes?
When one compares the UK with the rest of Europe on this graph its pretty clear that we are considerably cleaner than most of our critics so can we please stop searching for new ways to scupper our economy?: https://www.transparency.org/news/feature/corruption_perceptions_index_2017?gclid=EAIaIQobChMI1POIvOnE3QIVKLftCh3MdAiYEAAYASAAEgIrW_D_BwE
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