Money Launderers Target UK Property

March 5, 2015 Taxation in UK

LONDON – High-priced property in the UK could be a new target for laundered funds, and estate agents in the country are not doing enough to weed out the purchase of property with illicit funds.

According to the results of new research carried out by Transparency International, at least 40 000 properties in London are held by offshore companies, with nearly 90 percent of them located in tax haven jurisdictions, effectively concealing the true ownership of the property, and, perhaps, the sources of the funds used to pay for their purchase.

The proportion of properties held by offshore companies is higher in affluent areas of the city, with approximately 9.3 percent of houses in the City of Westminster held by offshore entities, while in Kensington and Chelsea, and the City of London the rate is 7.3 percent and 4.5 percent, respectively.

It was noted that since 2004 UK authorities have investigated the purchase of 144 properties, as potentially having links to money laundering, but the experts of Transparency International believe that this number is “only the tip of the iceberg”, with a significant number of properties in the UK being purchased with illicit funds stashed away in offshore tax havens.

In its report Transparency International further noted that the properties bought under investigation re estimated to be worth more than GBP 180 million, and in 2011 alone companies registered in the BVI purchased more than GBP 3.8 billion of properties in the UK.

However, despite the large value of the purchases, and the potentially high risk of suspicious transactions and money laundering, estate agents in the UK estate agents submit only around 0.05 percent of all suspicious activity reports in the country.

Photo By: Nick