Due to increased concern that the UK property market, particularly London and the south-east, has been used by foreigners to launder money, the British government has announced that the Land Registry will shortly publish the full list of 10 000 titles held by foreign companies. This list will not only be of interest to those seeking to prevent money laundering, but to tax authorities around the world, given how popular London property has become as an investment.
SARS and the Reserve Bank will no doubt take a keen interest in this list, notes Dan Foster, a tax director at Webber Wentzel attorneys. “Combined with the Common Reporting Standard (CRS) on worldwide reporting of financial assets, and the move towards beneficial ownership registers across the globe, this news out of the UK signals one less place to hide foreign assets,” he says.
Foster recommends that South African residents with offshore structures holding UK property, who have not previously declared such structures to SARS, take advantage of the Voluntary Disclosure Programme (VDP). If the property was purchased with illegally exported funds, regularisation with the Reserve Bank will also be required.
“As we have seen with the list of HSBC Swiss account-holders, SARS will waste no time in auditing people with hidden foreign assets. Once an audit commences, the opportunity for VDP has passed,” advises Foster.