Significant changes to the way properties belonging to foreign companies are sold, including that they must have their ‘beneficial owner’ revealed, were hurriedly voted through parliament yesterday.
Part of the Economic Crime (Transparency and Enforcement) Act, the measures include huge fines and even prison sentences for those who break the rules requiring them to register their properties with the soon-to-be-launched Register of Overseas Entities, and halting property sales if the entity selling it refuses to reveal the beneficial owner.
The measures within the legislation, which have been prompted by the government’s attempts to make life difficult for Vladimir Putin’s Russian oligarch supporters and their families following his invasion of Ukraine, include fines of £2,500 a day and up to five years in prison.
Timothy Douglas, Head of Policy and Campaigns for Propertymark, says the register will help to maintain the integrity of the housing market by ensuring it is clear who really owns a property, helping strengthen the AML checks already carried out by estate agents, “but only when information on the Register can be verified which will require further legislation to provide extra powers for Companies House,” he says.
“The legislation is four years too late, and while the issue is finally being addressed, it seems the real benefits will come in the second economic crime Bill.”
Chancellor of the Exchequer, Rishi Sunak, says: “Our Economic Crime Act will enable us to crack down harder and faster on dirty money and those who support Putin and his regime.
“We are using all of our financial might to send a clear message to the Kremlin that this criminal venture will end in total failure.”
Companies House will now begin work to implement the register as quickly as possible, working closely with the UK’s 3 land registries. Any foreign company selling properties between 28 February and the full implementation of the register will also be required to submit their details at the point of sale.
Image: Channel 4.