The government has announced plans to introduced a nationwide register of foreign companies that own properties in the UK in a bid to tackle corruption.
In what is claimed to be a world first, the system will reveal the beneficial owners of property controlled by overseas companies and other legal entities such as partnerships.
This will end the current and very common practice of foreigners owning UK property through offshore registered companies, as highlighted by Channel 4’s From Russian with Cash documentary in two years ago.
During it one of the agents was filmed suggesting how 80% of sales at the time in central London were with international, overseas buyers and that “50 or 60%” of them were carried out in “various stages of anonymity…whether it be through a company or an offshore trust”.
Police investigations looking at international corruption within the UK have identified more than £180m of property in the UK that are suspected proceeds of corruption, and that 75% of those involved were using international companies to cover their tracks.
“Greater transparency of ownership brings many benefits,” says Margot James, Minister for Small Business, Consumer and Corporate Responsibility. “We know that market transparency fosters confidence and trust. Transactions are improved and the market has greater confidence when peoel know how they are doing business with.”
The National Association of Estate Agents (NAEA) says such properties can be difficult for agent to deal with because “members often report difficulties in determining the ultimate beneficial owner when a property is owned by a trust or corporate identity, particularly when it is a non-UK trust or company”.
“We are committed to protecting the integrity and reputation of the UK property market and this register would be a valuable measure to increase transparency and investor confidence,” says Mark Hayward, Chief Executive of the NAEA (pictured, right).
“The extension of transparency requirements, which UK owners are already subject to, levels the playing field and means we would know who owns and controls UK property wherever they are from.
“Today we are inviting the views of overseas investors, property and transparency experts on how this register could be delivered.”
The plans are now to undergo a period of consultation before becoming law.