Property seller an offshore company

JonMitchell

user1977 said:

JonMitchell said:

SDLT_Geek said:

JonMitchell said:

Hi 

Just been reading quite a bit on offshore companies that owned UK properties (quite common, maybe some from the current government MPs!!!).

If in the case if one is to offer and purchase a property from such non-domicile sellers, is there any legal complications that as a buyer should watch out for? For a start, the sellers questionnaires included in the Contract Pack is most certainly empty or with "Don't Know" etc.

Was wondering are there any potential loopholes that as buyers should be of concern of?

Thanks all. 

You should look out for the incoming requirement for overseas companies to register as an overseas entity.

As a buyer you are likely to need your seller to be registered if you are to get good title.

Edit: here is a link to some guidance https://www.gov.uk/government/publications/overseas-companies-and-limited-liability-partnerships-pg78/practice-guide-78-overseas-companies-and-limited-liability-partnerships  That suggests there is a transitional period, so it depends on whether the purchase completes by 31 Jan 2023.

Might that be a reason why such sellers are offloading their  UK properties? Ie registering themselves 

Doubt it, and in any event they're too late to avoid it now - will need to be done in order to complete any sales.

Section 3.1.2 seems to say if transactions completes between 1Aug 22 and 31st Jan 23, there is no requirement to register....

If true there is quite a small window to complete before?

Thanks SDLT_GEEK for the info!

GDB2222

You mentioned SPVs. Occasionally, you come across houses owned by an overseas company, where the company has never traded and the house is the sole asset of the company. The idea is to avoid SDLT. You, as buyer, don't buy the house, you buy the company. 

user1977

GDB2222 said:

You mentioned SPVs. Occasionally, you come across houses owned by an overseas company, where the company has never traded and the house is the sole asset of the company. The idea is to avoid SDLT. You, as buyer, don't buy the house, you buy the company. 

Which is an even more complicated prospect for a buyer, as you'd need corporate lawyers involved (buy the company and you take on any other liabilities it has - how do you know it's done nothing other than own the property? As well as all the other hassle of owning an overseas company e.g. all the administration having to be done via professional directors in a tax haven). Only really worth it if there is a massive stamp duty saving to be made.

JonMitchell

GDB2222 said:

You mentioned SPVs. Occasionally, you come across houses owned by an overseas company, where the company has never traded and the house is the sole asset of the company. The idea is to avoid SDLT. You, as buyer, don't buy the house, you buy the company. 

Don't really get your point, if you don't mind me asking.

The advert listing was for the sale of property, not the offshore co. Am I missing something here?

Thanks for your pointers.