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Foreign owners’ property register will bridge information gap

The UK Government has recently announced their plans to introduce a new public register that will compel foreign companies who own or buy property in the UK to disclose their ultimate owners. 

This register, which will be available by early 2021, is part of a bid to crack down on financial crimes like money laundering. 

London’s high-end property market attracts large volumes of foreign investment, which creates a prime opportunity for money laundering. The ultimate ownership of properties is often obscured with data available for just half of the London land titles owned by overseas companies. 

The introduction of a register of foreign owners will bridge this information gap, enabling authorities to identify the ultimate owners of such properties and paint a picture of any suspicious activity. In turn this will help to reduce the number of loopholes which allow money launderers to abuse the property market. 

This new initiative further demonstrates the government’s crack-down on tax avoidance and white-collar crime. The government’s focus on tackling these problems, has been spurred on by the publication of the ‘Panama Papers’ and the more recent ‘Paradise Papers’, which exposed the number of companies and individuals taking advantage of complex tax arrangements and opaque business structures in more favorable tax jurisdictions. 

While this marks a significant change in the government’s approach to tackling financial crimes like money laundering, to ensure its effectiveness the property industry must take pro-active steps to combat this illicit activity. 

Agents within the property industry must take it upon themselves to conduct thorough due diligence and ensure that the identity of the ultimate beneficiary is known when conducting transactions. The more information agents have access to, the better the opportunity they will have to identify suspicious activity. 

With the financial crime crack down high on the political agenda and the industry actively tackling the threat, it is hoped that we will take significant steps in reducing financial crime in the UK. 

*Michael Harris is Director of Financial Crime Compliance at LexisNexis® Risk Solutions

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