The government has brought forward its plans to introduce a Register of Overseas Entities to crack down on foreign criminals using UK property to launder money.
Largely thought to have been kicked into the long grass, the register has been given new impetus by Russia’s invasion of Ukraine and will be introduced via the introduction of the Economic Crime Bill.
The rules will require anonymous foreign owners of UK property to reveal their real identities to ensure criminals cannot hide behind secretive chains of shell companies, setting a global standard for transparency.
Those who do not comply will face sanctions including restrictions on registering or disposing the title of the land.
Although the initiative is being framed as a fight against ‘criminals’ it will make it more difficult for Putin’s wealthy Oligarch supporters to hide their ownership of properties in the UK and particularly London.
Unusually, the register will be applied retrospectively to property bought up to 20 years ago in England and Wales and since December 2014 in Scotland.
Timothy Douglas (pictured), Head of Policy & Campaigns at Propertymark, says: “We called on the UK Government to introduce a public register of overseas entities owning property in the UK back in 2018 and it is high time that legislation has been brought forward.
“Despite repeated promises, including being mentioned in the December 2019 Queen’s Speech, the UK Government failed to deliver.
“But recent events serve as a reminder that property is a high-risk sector for money laundering because any foreign company can buy property in the UK without having a presence in the country.
“Criminal funds can be concealed and made to look legitimate through an untraceable ‘company’ and subsequently the purchasing of property.
“When agents try to determine the true, or ‘beneficial’ owners, they find only documents listing shell companies.
“To maintain integrity in our housing market it is vital to know who the ultimate owner of a property is and it is imperative that the register is set up as soon as possible.
“The longer we wait for the register, the longer corrupt individuals will be able to use the UK property market to hide their wealth.”
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