Campaigners have warned that the government’s plans to crack down on “foreign criminals” laundering money through the UK property market, may be vulnerable to loopholes.
The comments come after the government set out plans to force those who own UK property through foreign-registered shell companies to reveal their true identities.
The plans will see the government draw up a register of foreign property owners in the UK, which will cover all properties in England and Wales bought by overseas entities over the last 20 years.
Overseas entities will be required to give over the name of a “beneficial owner” and register that person with Companies House.
The move will put foreign owners on a level footing with UK property owners, who are already required to disclose the identities of their beneficial owners to Companies House.
However, campaigners have warned that the government’s plans may be vulnerable to loopholes.
Transparency International said the 18-month long transition period will allow overseas owners time to dispose of any UK properties, before the law comes into effect.
The law may also allow those working through companies that say they do not have a beneficial owner to own UK property without revealing their identities.
Transparency International noted that there were also 1,892 properties purchased by overseas companies before January 1999, which will be exempt from the government’s new laws, which only cover properties acquired over the last two decades.
Rachel Davies, Head of Advocacy at Transparency International UK, said: “Transparency over who really owns property here is vital to addressing Britain’s role as a global hub for dirty money from Russia and elsewhere.”
“To ensure these new measures are as effective as they can be, we urge the government to close the loopholes that would provide those with money to hide ways to continue to conceal their ownership of UK property.”