41,000 London properties held by foreign companies – 90% in tax havens
UK official data show that almost 41,000 London properties owned by foreign companies 90% are based in tax havens such as the British Virgin Islands (BVI), which do not have to disclose ownership information.
Transparency International, the anti-corruption organisation, used Land Registry and Metropolitan Police data to identify 40,725 properties registered to overseas companies in London and while that number accounts for only 1.3% of the total housing stock in the British capital, the high number owned by tax haven shell companies and their location in the city, suggests that a significant number of London’s prime property purchases are likely made from the proceeds of corruption and other criminal activities.
“There is growing evidence that the UK property market has become a safe haven for corrupt capital stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies,” said Robert Barrington, executive director of Transparency International UK.
36,342 London properties totalling 2.25 sq miles are held by offshore haven companies. Of these, 38% in the British Virgin Islands, 16% in Jersey, 9.5% in Isle of Man, and 9% in Guernsey;
Almost one in ten properties in the City of Westminster (9.3%), 7.3% of properties in Kensington & Chelsea, and 4.5% in the City of London are owned by companies registered in an offshore secrecy jurisdiction. TI-UK has launched an interactive map of London which reveals the statistics for each borough – ukunmaskthecorrupt.org;
In 2011 alone, £3.8bn worth of UK property was bought by British Virgin Islands-registered companies;
According to the latest figures, which cover October 2013 to September 2014, estate agents contributed to only 0.05% of all Suspicious Activity Reports (SARs) submitted.
TI report
The Guardian reports that the Metropolitan police have revealed that more than £180m of British property has been put under criminal investigation in the last decade as the likely proceeds of corruption. Detectives have warned it is the tip of the iceberg.
In almost every case, suspected international money launderers hold the properties in secretive offshore companies. One investigator said the arrangements were “like putting money in a Swiss bank – they have become ubiquitous for the corrupt”.
Half of the 144 properties investigated by Scotland Yard were registered to companies in Jersey, which does not automatically declare the identity of the beneficial owner.
DCI Jon Benton of the Met’s Proceeds of Corruption Unit, said: “In nearly all the grand corruption cases we investigate, we find . . . proceeds of corruption being used to purchase high-value properties.
“Properties that are purchased with illicit money, which is often stolen from some of the poorest people in the world, are nearly always layered through offshore structures.”
The key recommendation is that transparency should be established over who owns the companies that own so much property in the UK through making such transparency a Land Registry requirement.
The Financial Times reports that in 2013 the government announced legislation that will require British companies to make ownership information publicly accessible, though the rules will not apply to overseas companies.
