Foreign owners of UK property will be required to register their real identities in the new economic crime bill which the government has fast-tracked following the Russian invasion of Ukraine.
The aim is to prevent foreign owners from laundering “dirty money” through British ownership and to increase the number of Unexplained Wealth Orders (UWOs) issued to oligarchs whom the government deems corrupt.
The government says the property register will set “a new global standard for transparency” and that people who fail to follow the new rules will face up to five years in prison.
The UWO reforms see its scope widened to include people who hold property in the UK in a trust and barriers to its use are removed.
Additionally, the Treasury intends to strengthen enforcement of penalties through a broader strict civil liability test, and the government has released a white paper detailing its plans to overhaul Companies House.
Prime Minister Boris Johnson says: “There is no place for dirty money in the UK. We are moving faster and harder to tear down the facade behind which those who support Putin’s campaign of destruction have hidden for so long.
“Those who support Putin have been warned: there will be nowhere to hide your ill-gotten gains.”
Timothy Douglas, Head of Policy and Campaigns at Propertymark, comments: “Propertymark has called on the government to introduce a public register of foreign entities owning property in the UK in 2018 and it is high time the legislation was introduced.
“Despite repeated promises, notably mentioned in the Queen’s Speech of December 2019, the government has not delivered on its promises.
“However, recent events are a reminder that real estate is a high risk sector for money laundering, as any foreign company can buy property in the UK without having a presence in the country.
“Criminal funds can be concealed and given the appearance of being legitimate through an untraceable ‘business’ and subsequent purchase of assets. When agents try to determine the real owners or “beneficiaries”, they only find documents listing the shell companies.
“To maintain the integrity of our housing market, it is essential to know who is the ultimate owner of a property and it is imperative that the register is put in place as soon as possible. The longer we wait for the register, the more individuals corrupt will be able to use the UK property market to hide their wealth.