UK property disclosures, what has been agreed?

The UK has signed up in principle to the OECD’s new, catchily titled,  Multilateral Competent Authority Agreement on Automatic Exchange of Readily Available Information on Immovable Property (the “IPI MCAA”). This sits alongside existing global transparency tools like the Common Reporting Standard for financial accounts but is focused specifically on real estate – who owns it, how it is used and what income it generates.

Under the IPI framework, tax authorities in participating countries will routinely send each other standardised data on properties where a non‑resident person has an interest, with implementation currently targeted for 2029 or 2030. The UK is one of an initial group of jurisdictions that have announced their intention to implement the regime, but that list is expected to grow by the time it comes into force.

UK property disclosures, what information will be exchanged?

In broad terms, the categories of information expected to be exchanged include:

• Details of the legal and, where known, beneficial owner (individuals and entities).
• Key property identifiers and characteristics (address, type of property, and other registry‑style data).
• Transactional data such as acquisition and disposal dates and values.
• Information on rental or other property income where this is reported for tax or other official purposes.

In practice, this means that, for example, HMRC will be able to receive data from another country showing that a UK‑resident individual owns or controls a rental property there and the level of income declared locally. Conversely, foreign tax authorities will receive structured data from the UK relating to properties in the UK that are owned or let by their residents, including through companies or other vehicles.

Interaction with existing UK transparency measures

The new framework builds on a broader shift towards transparency in the UK property sphere rather than replacing existing measures. Relevant examples include:

• The Register of Overseas Entities at Companies House, which already requires overseas companies owning UK land to disclose their beneficial owners, with data available to HMRC and enforcement agencies.
• Stamp duty land tax (SDLT), land and property transaction returns and Land Registry records, which collectively capture detailed ownership and transaction information.
• Recent changes bringing most UK residential property held through offshore structures fully within the scope of UK inheritance tax and capital gains tax, reducing the perceived benefits of “enveloping”.

Practical implications for private clients with property income

For clients with foreign property income and gains, with the abolition of the remittance basis and introduction of the new foreign income and gains regime from 6 April 2025, most UK‑resident individuals will be within scope to report their worldwide income and gains to HMRC, including rental profits and property disposals overseas.

Key practical points include:

• Any undeclared foreign rental income or gains should be reviewed urgently with a view to making a voluntary disclosure before automatic exchange begins, as penalties and reputational risks typically increase once authorities obtain third‑party data.
• Coming forward voluntarily to make an unprompted disclosure will usually give access to lower penalty ranges than if HMRC has already opened an enquiry or raised questions using exchanged data, in which case the disclosure will be treated as prompted and penalised more heavily.
• Structures using offshore companies, trusts or other vehicles to hold UK or foreign property should be revisited to confirm that they are still fit for purpose in light of modern anti‑avoidance rules, inheritance tax changes and the likelihood that both ownership and income details will be shared with other tax authorities.
• Clients who are tax‑resident in another jurisdiction but own UK property (directly or via entities) should expect their home tax authority to receive HMRC data on purchases, sales and, in many cases, rental income and may need local advice on how that information will be used.

UK property disclosure and penalties

HMRC’s penalty regime distinguishes clearly between “unprompted” disclosures, where a taxpayer approaches HMRC before any indication of enquiry, and “prompted” disclosures, where the disclosure follows HMRC contact or a clear risk that HMRC already has, or is about to obtain, relevant information. In broad terms, the statutory penalty ranges are lower for unprompted cases, typically they are halved. But in addition, there is generally greater scope to reduce the penalty within that range for quality of disclosure, cooperation and helping HMRC to quantify the tax.

In the context of international property information exchange, this means that waiting until HMRC writes with questions based on data received from another tax authority is likely to lead to higher penalties than if a full and candid disclosure is made in advance. For clients who suspect historic irregularities, taking advice early and considering a managed disclosure, for example under one of HMRC’s established disclosure facilities, can materially reduce the overall cost of regularising their position.

Tim Humphries, RPGCC’s Head of Tax, added “with the new UK property disclosure if you are UK resident and own property overseas or are non-UK resident and own property in the UK, now is the time to review what has been disclosed to HMRC and come forward before they approach you if anything is amiss”.

If you would like assistance with the UK property disclosure, your property tax affairs in general or if you would like assistance reviewing your property income and gains please contact us today on 020 7870 9050.