All that ‘dirty money’ gets washed up in UK realty
London: At least £122 billion (Dh755 billion) of property in England and Wales is held through companies in offshore tax havens where ownership is difficult to trace, a Financial Times analysis of Land Registry data has found.
The figure — more than the total value of all housing stock in Westminster and the City of London — reveals for the first time the scale of offshore property ownership in the UK. It raises concern that London property has become a haven for dirty money from around the world.
“Property is a key risk area for the UK,” said Robert Barrington, executive director of Transparency International UK. “From Abacha to Marcos and the Gaddafis, corrupt leaders have used shell companies and trusts to hide their identities and safeguard stolen fortunes, often in property.”
Nearly two out of three of the 91,248 foreign-company owned properties in England and Wales are held via the British Virgin Islands and Channel Island structures. Just less than two-thirds of the offshore-owned property by value is in Greater London, with 27 per cent in the City of Westminster.
The Land Registry data do not allow a breakdown between residential and commercial property.
When David Cameron, the prime minister, announced last year that details of who owned UK-based companies would be made publicly accessible, the government highlighted the need for transparency to tackle tax evasion, money laundering and other crimes.
Regulations
Yet Land Registry records show only the owner or entity holding a property, not the ultimate owner of the company through which the asset is held.
Anti-money laundering regulations require estate agents and lawyers to carry out due diligence on those involved in property transactions, which includes checks on beneficial ownership. But doing so can be difficult.
“When you have a company hidden offshore, it is I think almost impossible for your average estate agent to find out what on earth is going on,” said Peter Bolton King, global residential director at the Royal Institution of Chartered Surveyors. “You have to make a professional judgment whether you are satisfied with the information you are provided with.”
Besides offering privacy to individuals and groups, the British Virgin Islands and the Channel Islands are attractive because of their tax regimes and because of their strong ties with London’s banking and business community.
