The UK government is still in the dark about who owns tens of thousands of British properties, after thousands of offshore firms failed to comply with new transparency laws, which campaigners said exposes the UK property market to huge money-laundering risks.
There are almost 52,000 properties in Britain, worth a combined sum of £6.7bn, that are owned by offshore companies that have failed to register their ‘beneficial owners’ with Companies House, new research from Transparency International shows.
The situation means thousands of flats and houses are at risk of being owned by oligarchs, money launderers, and sanctioned individuals via offshore entities in opaque jurisdictions such as Jersey and the British Virgin Islands.
The research shows the owners of more than half (56 per cent) of all UK properties owned by offshore firms failed to identify themselves by the 31 January deadline, following the launch of the UK’s Register of Beneficial Ownership in August 2022.
It showed around 34,500 offshore companies simply failed to register their beneficial owners, despite the threat of fines and prison sentences for those who failed to comply.
The research showed companies that failed to comply include firms that are reportedly owned by oligarchs and kleptocrats that have been sanctioned in the Britain, Europe, and United States.
Transparency International showed a further 3,151 offshore property owners, which collectively hold 15,217 properties in England and Wales, put forward non-compliant filings that failed to actually reveal any ultimate owners at all.
In one case, an opaque British Virgin Islands registered entity, called Lengard Projects Ltd, that owns an apartment in Chelsea Harbour, lists another British Virgin Islands registered firm, Ics4 Holdings Investment Ltd, as its beneficial owner.
Transparency International instead claims Nigerian businessman Igho Sanomi is likely the true beneficial owner of Lengard Projects Ltd, in pointing to US court documents showing he owns a 30 per cent stake in the British Virgin Islands firm.
The paper also claims more than 4,000 offshore firms name trusts as their beneficial owners, meaning the individuals behind those entities remain obscured.
It notes that in one such case, the president of Azerbaijan Ilham Aliyev, and his wife, own a Hampstead mansion via a chain of offshore companies that are ultimately owned through an Isle of Man registered trust.
A 2021 report from Chatham House claimed the Aliyev family has purchased more than £400m worth of UK property, despite the fact the Azerbaijani president’s current salary is just £80,000 a year.
Transparency International’s report also says 2,358 offshore firms claim they have no beneficial owners at all, by listing a “managing officer” as their beneficial owners instead.