Individuals that own UK properties via chains of “secretive” shell companies will from today be forced to reveal their true identities, after the UK government launched a new register of UK property owners today.
The first-of-its-kind register will require those seeking to buy or own UK property via offshore entities to list the identities of the people that control those overseas firms, or face fines and prison sentences if they fail to comply.
The launch of the new register comes as part of the UK government’s wider efforts to crackdown on the estimated £100bn worth of dirty that flows through the country each year.
Commenting on the launch, business minister Lord Callanan said the new register will help ensure the UK is a “place for legitimate business only” by lifting the curtain “on those criminals attempting to hide their illicitly obtained wealth”.
From today, any foreign company seeking to buy UK land or property will be forced to identify their beneficial owners, and present verified information to Companies House.
Those overseas entities that have acquired any UK properties since January 1999 will also be given six months to register that same information, the UK government said.
Any overseas entities that have disposed of any UK property since 28 February 2022 – when the plans for the register were first put forward – will also be required to submit statements to Companies House.
Those who fail to comply will be blocked from selling, leasing, or mortgaging their properties and could face fines of up to £2,500 and prison sentences of up to five years.
The new register is set to support the government’s wider efforts to combat money laundering and root out the “Russian oligarchs” and “corrupt elites” that seek to use the UK property market to hide illicit wealth, the government said.
The launch of the new register sits as a major component of the UK government’s Economic Crime Bill, after the package of proposals aimed at tackling illicit finance, were first introduced in February and given Royal Assent in March.
Marilyn McKeever, partner at law firm BDB Pitmans, explained that while the register “has been in the pipeline for six years,” the plans were “accelerated” following Russia’s invasion of Ukraine.
McKeever however warned that oligarchs and others may still avoid identification by nominating a beneficial owner and registering that individual instead.
Campaigners welcomed the government’s initiative as a “crucial first step” in boosting transparency and deterring criminals and corrupt individuals from laundering money through the UK property market.
Rachel Davies Teka, advocacy director at Transparency International said: “This register should help start to lift the veil of secrecy over offshore companies that own real estate in the UK – a loophole that has been exploited by oligarchs and kleptocrats for too long.”