Foreign companies owning UK properties will have to reveal their ultimate owners on the world's first public register, or face up to five years in jail for concealing the identify of those using shell companies, as part of a crackdown on money laundering
The Department of Business, Energy and Industrial Strategy (BEIS) is set to publish draft legislation, after its research showed nearly 75% of the UK property industry agree the new register will lead to an increase in transparency and reduce the potential for illegal activity.
Separate research from pressure group Transparency International indicated that over £4.2bn worth of London properties are bought with suspicious wealth.
Under BEIS’s proposals there will be a ban on any foreign entity selling or leasing property without first publicly declaring its beneficial owner; an individual found to have committed this offence could face up to five years in jail and an unlimited fine.
Individuals who fail to register overseas entities when instructed face up two years in jail and an unlimited fine.
Individuals who knowingly try and deceive the register by providing false information face up two years in jail and an unlimited fine.
Under the new draft laws, companies will also be required to provide annual updates to Companies House to ensure the information on the register is up-to-date.
Business minister Richard Harrington said: ‘The UK is known around the world for its open and dependable business environment and this reputation is maintained by keeping under review our required high standards.
‘That is why we are introducing the world’s first public register which will expose the ultimate owners of overseas shell companies, giving authorities the information, they need to come down on criminals who launder their dirty money through the UK’s property market and to seize the proceeds of crime.’
The consultation on the registration of overseas entities bill will close on 17 September.
Report by Pat Sweet