A report by a search agency (or sometimes by a local authority) detailing planning and other policies affecting the property, whether any environmental health, housing or contaminated land notices have been served, as well as disclosing recent planning and building control documentation. It will also disclose the status (adopted or private) of the adjacent carriageway and footpath and whether there is an adopted water main and/or sewer adjacent to the property. It is usually obtained and exhibited by sellers’ or landlords’ solicitors to purchasers’ or tenants’ solicitors

An exclusivity agreement (or lockout agreement) may be used where the buyer wants to prevent the seller from negotiating for the sale of the property with any other party for a fixed period. Its objective is to offer the buyer time to progress the transaction without running the risk of being gazumped by a rival buyer. It does not guarantee that the sale contract will be entered into. At the end of the exclusivity period, either party can walk away and the seller will be free to sell the property to a third party. Residential developers use exclusivity agreements to give buyers a fixed exclusive period in which to exchange contracts. In return, the buyer pays a non-refundable deposit that can be forfeited if the deadline is not met. In commercial transactions, buyers may ask for exclusivity where: • there is a lot of interest in a property, to allow themselves a clear run at attempting to exchange contracts, or • they need to ascertain the viability of a proposed development or arrange finance Lockout

Local Government analysis: The Court of Appeal decided that two buildings occupied by property guardians were a house in multiple occupation (HMO) for the purposes of section 254 of the Housing Act 2004 (HA 2004). The owner of each property had entered into an agreement with Global Guardians Management Ltd (Global Guardians) for the provision of guardianship services. The properties were managed by an associated company Global 100 Ltd (Global 100) which granted licences to individuals to occupy the property and act as guardians with the individuals paying a licence fee to live at the property. The relevant local authorities decided that the properties were HMOs. The First-tier Tribunal (Property Chamber) (FTT) made rent repayment orders in favour of the occupiers of the buildings and upheld penalty notices served by the local authority in respect of one of the buildings. The Upper Tribunal (UT) upheld those decisions. Global Guardians and Global 100 appealed unsuccessfully to the Court of Appeal. Written by Ian Peacock, barrister at 4-5 Gray’s Inn Square.

Under section 1013 of the Companies Act 2006 (CA 2006),the Crown may, within 12 months, disclaim any property which has passed to it as bona vacantia following the dissolution of a company under CA 2006, s 1012: where the disclaimed property is freehold land, escheat occurs. The effect of disclaimer is that the property is treated as if it had never vested in the Crown as bona vacantia. The principal consequence of escheat is that the freehold estate is extinguished. In the case of the Crown, the land becomes part of the Crown Estate. It is important to note that the Crown is not a successor

Restructuring & Insolvency analysis: The High Court in Palmer and another (in their capacity as joint trustees in bankruptcy of Shaun Collins) v Sans deals with the question of whether the bankrupt (Mr Collins) held the property being Flat 2, Chestnut House, Whimbrel, London, SE28 8JE (the property), on trust for the respondent (Mr Sans) as at the time it was acquired by the bankrupt in 2013. The High Court held that the particular facts of this case support the creation of a trust, such that the property was held on a constructive trust for the benefit of the respondent. As the beneficial interest was already vested in the respondent, the legal transfer was irrelevant under section 339 of the Insolvency Act 1986 (IA 1986), as on the true analysis, the transfer was merely a formality. Accordingly, the trustees in bankruptcy’s application pursuant to IA 1986, s 339 failed. Written by Katherine Traynor, barrister at Landmark Chambers.

Some investors, particularly non-UK resident investors, may hold UK real estate as an investment through an offshore unauthorised property unit trust. Such unit trusts are commonly established in one of the Channel Islands (typically, Jersey or Guernsey) or the Isle of Man, but may be established under the law of another non-UK jurisdiction. This Practice Note refers to such property unit trusts, wherever established, as Jersey Property Unit Trusts (JPUTs) (since Jersey property unit trusts are common). JPUTs were popular historically because it used to be possible to transfer UK real estate to a JPUT free from stamp duty land tax (SDLT). This was pursuant to a specific exemption known as 'seeding relief', which was abolished from 22 March 2006. A different form of seeding relief was introduced by section 133 of the Finance Act 2016 (FA 2016), but this only applies to authorised contractual schemes and property authorised investment funds, not JPUTs. Because of this historic relief, and the continuing ability to transfer units in a JPUT owning

Owners of UK property may choose to hold their property through a company incorporated and resident for tax purposes outside the UK (referred to in this Practice Note as a non-UK company). There may be a number of non-tax reasons for this, including: • commercial convenience • regulatory reasons, or • preventing information as to the ownership of property from becoming public, however, note that since 1 August 2022 the UK maintains a Register of Overseas Entities holding UK property which requires disclosure of the beneficial owners of such overseas entities under the Economic Crime (Transparency and Enforcement) Act 2022 which may practically erode this perceived benefit. For more information, see Practice Note: Register of overseas entities that hold UK property—fundamentals However, tax is often a contributing factor and non-UK companies have historically been a tax effective vehicle for non-UK resident investors investing in property. Such structures remain popular despite the erosion over recent years of many of the tax advantages. A key exception

Although a buyer may have reasons to hold commercial and, sometimes, residential property, via an offshore holding structure, the most common vehicle for investment in UK real estate tends to be the UK limited company. A key exception to this is in relation to dwellings (held for private purposes), for which a UK company is unlikely to be a tax efficient holding structure. This follows the introduction in April 2013 of the annual tax on enveloped dwellings (ATED) and related provisions and the introduction of the Single higher rate of SDLT for high-value residential property transactions. The ATED regime now applies to dwellings worth more than £500,000 subject to various reliefs. For further details, see Practice Notes: ATED—the basics and Single higher rate of SDLT for high-value residential property transactions. This Practice Note summarises the direct tax (ie corporation tax) treatment of a UK incorporated and tax-resident company (referred to in this Practice Note as a UK company) investing or dealing in UK land. The main advantages of a UK

UK real estate can be held as an investment through an offshore unauthorised property unit trust. Such unit trusts are commonly established in one of the Channel Islands (typically, Jersey or Guernsey) or the Isle of Man, but may be established under the law of another non-UK jurisdiction. This Practice Note refers to such property unit trusts, wherever established, as JPUTs (since Jersey property unit trusts are common). It is assumed for the purposes of this Practice Note that UK real estate is held by a JPUT as an investment rather than an item of trading stock. For details of this distinction, see Practice Note: Dealing in property or property investment? JPUTs were popular historically because it used to be possible to transfer UK real estate to a JPUT free from stamp duty land tax (SDLT). This was pursuant to a specific exemption known as 'seeding relief', which was abolished from 22 March 2006. When in force, seeding relief enabled a property held directly by a vendor to be sold

Along with limited partnerships (LPs), limited liability partnerships (LLPs) are used as vehicles for holding UK real estate. This Practice Note examines the direct tax (ie corporation tax, income tax and capital gains tax (CGT)) and annual tax on enveloped dwellings (ATED) treatment of a UK LLP in a property context. In this note CGT refers to capital gains tax and corporation tax on chargeable gains except where specified otherwise. For further detail as to the tax treatment of an LLP in general, see Practice Note: Taxation of UK LLPs. The direct tax treatment of an LP in a property context is considered in Practice Note: Tax treatment of a UK limited partnership. The indirect tax (ie VAT and SDLT) treatment of an LLP differs from the direct tax treatment and is outside the scope of this Practice Note. For further details, see Practice Notes: • Partnerships and VAT, and • SDLT and partnerships—general principles and ordinary transactions As with other types of partnerships, including

Partnerships are often used as vehicles for holding UK real estate. The forms of partnership used are generally limited partnerships (LPs) and limited liability partnerships (LLPs). This Practice Note examines the direct tax (ie corporation tax, income tax and capital gains tax (CGT)) and annual tax on enveloped dwellings (ATED) treatment of a UK LP in a property context. For the purposes of this Practice Note, CGT refers to both capital gains tax and corporation tax on chargeable gains except where specified otherwise. The direct tax treatment of an LLP in a property context is considered in Practice Note: Tax treatment of a UK limited liability partnership. For circumstances in which contractual arrangements may create a partnership, see Practice Note: Property holding structures—direct tax treatment of contractual joint ownership. The indirect tax (ie VAT and SDLT) treatment of a partnership differs from the direct tax treatment and is outside the scope of this Practice Note. For further details, see Practice Notes: • Partnerships and VAT, and

The simplest form of joint investment in property is for the investors to own the property jointly. While this is relatively rare in a commercial context, where investors prefer to establish a vehicle such as a partnership or a company to act as a joint venture vehicle, it is still the most common form of joint investment. Most investments by individuals will take this form. Contractual joint ownership can take many forms, such as: • where each party has a direct legal interest in the asset (see Practice Note: Establishing a beneficial interest (joint ownership)) • where a trust (whether express or implied) is formed over the property, so that the property is held by trustees on behalf of beneficiaries of the trust (see Practice Note: Trusts of land—property) • where an implicit partnership arrangement exists (see Practice Note: Forming a general partnership and continuing obligations) This Practice Note considers each of these forms of joint ownership, their direct tax (ie income tax, corporation tax and capital gains