February 1, 2024
Our February 2024 summary of the latest developments in Property law and practice is as follows:
Transparency of Trusts
The Government has published a consultation document seeking views on improving the transparency of land ownership where land is held on trust. The Government says that it is particularly interested to hear views on the extent to which the transparency of land held by trusts not associated with entities subject to the requirements of the Register of Overseas Entities could be improved. This would include information on land held by UK-resident trusts. While we have a register of legal ownership at the Land Registry, and a Trust Registration Service, the consultation underlines that the Land Registry does not reveal equitable ownership of land and the Trust Registration Service only holds limited information relating to land. In seeking to strike a balance between privacy and transparency, the consultation will consider whether it may be more appropriate for the government to look at other means to record and make available information on trusts.
Building Safety Act 2022
The Building Safety (Description of Higher-Risk Building) (Design and Construction Phase) (Wales) Regulations 2023 (SI 2023/1210 (W. 213)) came into force on 1 January 2024. These Regulations define what constitutes a ‘higher-risk building’ in Wales and makes provision for these buildings to be subject to the enhanced regulatory regime of the Building Safety Act 2022 (during the design and construction phase.) A ‘higher-risk building’ is essentially a building or structure that is at least 18 metres high or has at least 7 storeys and contains at least one residential unit (or contains a hospital, a care home, etc.) The regulations also include provisions for determining the height of a building (regulation 4) and the number of storeys in a building (regulation 5).
Land Transaction Tax
The Welsh Government is consulting on potential changes to the Land Transaction Tax (LTT) rules relating to higher rate residential land transactions, more specifically in relation to the rules relating to the replacement of the taxpayer’s main residence.
As under the SDLT regime, the purchase of a dwelling may result in the taxpayer owning an interest in more than one dwelling. If so, subject to rules creating an exception and a right to a refund, higher rates of LTT should apply. Refund rules apply where the taxpayer purchases a dwelling as a new main residence before disposing of their current main residence. In such a case, at the end of the day of purchase, the taxpayer will own an interest in more than one dwelling. Higher rates of LTT will therefore apply. However, if the current main residence is sold within 3 years of the day of purchase of the new dwelling, the original tax return can be amended, and the additional tax paid can be reclaimed. The proposed new rules will allow an unlimited extension of time in certain specified circumstances. This change would allow a refund on all qualifying transactions taking place since 1 April 2018. The consultation runs until 17 March 2024.