Earlier this year, Jamie Tavares (corporate solicitor) and David Gordon (corporate solicitor and partner) worked with Andreas Williams (a real estate and property development expert with extensive experience spanning over 25 years) to secure investment into UK property for overseas clients through an SPV (see below).So what is an SPV? An SPV, or a special purpose vehicle, is a legal entity, most commonly a company, established for a specific or temporary purpose. Many of the clients we work with at Healys use SPVs to hold property and to structure their investments.With this in mind, we decided to explore the new developments in relation to the Register of Overseas Entities with Andreas and ask him how that might impact on his property clients.
Jamie: How do you aim to support your clients and what excites you most about your work?
Andreas: I enjoy the ability to provide property solutions for clients with often complex purchase requirements and parameters. My clients are typically from Africa, Asia and the Middle East with specific requirements for their real estate acquisitions - the challenge of providing a cohesive and stress-free transaction excites me.I guide our clients throughout the process by providing expert advice and try to navigate them through the challenges conveyancing can bring! I try to simplify the process by breaking it down into manageable steps, to avoid clients becoming overwhelmed.
Jamie: What are your thoughts on the Register of Overseas Entities that came into force on 1 August 2022?
Andreas: In my opinion it was just a matter of time before this particular piece of legislation was enacted. Allow me to explain by way of a recent example. A client recently acquired a property with an option to purchase the British Virgin Island registered company which it owned. As a consequence of the lax regulatory and reporting requirements in that particular jurisdiction, we were unable to follow through with the purchase of the company as no accounts had been filed for over 20 years with potential historical tax liabilities being passed on to my client! If my client had not been properly advised, they would have been penalised for this oversight if we had decided to proceed with the company purchase. More stringent legislation with regards to the registration of beneficial owners will greatly assist in tightening these loopholes in future.
Jamie: How have your clients reacted to this new development?
Andreas: As part of our due diligence process, we as a company insist that all clients complete our rigorous "know your client" documentation. This is non-negotiable. This pre-emptive approach leaves no option for clients who are unwilling to provide the required paperwork and as such all our clients fall in line with the new requirements for the Register of Overseas Entities.
Jamie: How best do you think you/we as professional advisers can help clients who are impacted by this new regime?
By providing as much information as possible about the new rules and how these rules ultimately will benefit the client. We explain the various options available to them including, but not limited to, overseas entities depending on their individual circumstances and inheritance planning. Very recently, we advised an overseas client to set up a UK Trust based on their peculiar circumstances.
Jamie: What exciting developments are you anticipating in the last quarter of 2022?
Andreas: With the rise in prices and the energy crisis, our sense is the GBP will weaken further, which makes foreign investment more appealing and affordable in what is one of the most expensive cities in the world.
Jamie: Any other notable comments you'd like to make?
Andreas: The instability of the local currency in sub Saharan Africa and in particular West Africa has made investment in UK property more appealing to what is essentially our largest client base. As a consequence, we are experiencing a high volume of enquires from high net worth individuals seeking the relative stability of investment in prime central London real estate.A huge thank you to Andreas for sharing his insights and experiences with us at Healys. While things are feeling unstable, Andreas leaves us with some feelings of hope about potential investment in the UK economy in the near future.This article was written by Jamie Tavares.