A public register of property designed to crack down on dirty money laundered through the UK is set to go live today.
The Register of Overseas Entities will force landowners in the UK to reveal their identity, in an effort to root out oligarchs and criminals buying property.
Kleptocrats and criminal gangs have used London to funnel cash, turning dirty money into legitimate investments in property.
Cashing in: Ever-growing house prices, and relative stability, have made the UK attractive to buyers
Ever-growing house prices, and relative stability, have made the UK attractive to buyers.
Many preferred to hide their ownership behind complex webs of shell companies registered in secretive offshore tax havens.
But when Britain tried to freeze oligarch assets earlier this year, officials struggled to trace them.
Business Minister Lord Callanan said: ‘Corrupt elites and oligarchs have been using UK property as a vehicle to launder illicit money.
‘There are still too many foreign companies funnelling their illegal wealth through UK property, while they hide behind shell companies in overseas jurisdictions.’
From today, any overseas entity buying property in the UK must reveal its end-beneficiary.
A so-called ‘regulated professional’ – who may be a banker, lawyer or tax adviser, among others – will be charged with checking the information they give.
If the buyer lies, and the regulated professional knowingly allows this, both will be on the hook for hefty fines or even a jail sentence of up to five years.
The rules will also apply to foreign landowners who bought property after 1999 in England and Wales, and 2014 in Scotland – the date each land registry respectively started collecting data on foreign owners.
Callanan said: ‘Those that don’t follow the rules can expect to feel criminal sanctions.’
Rachel Davies, of Transparency International UK, said: ‘Implementation is key to its effectiveness, but it’ll give criminals and kleptocrats one less place to hide.’