New draft legislation launched to expose true owners of UK property bought by foreign entities

Foreign companies owning UK properties will have to reveal their ultimate owners on the world’s first public register, after a new draft law was laid yesterday.

Criminals who illegally profit from owning British property will face five years in jail for concealing the identity of owners.

The register forms part of a wider crackdown on money laundering.

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.”

Under the new Draft Register of Overseas Entities Bill, companies will also be required to provide annual updates to Companies House to ensure the information on the register is up-to-date.

As well as publishing the draft Bill yesterday, the Government also launched a consultation on it, specifically inviting estate agents to respond. The consultation closes on September 17.

Mark Hayward, chief executive of NAEA Propertymark, said: “We welcome the Government’s draft Overseas Entities Bill, having previously called for a public register of overseas companies owning property in the UK to be set up.

“Property is a high-risk sector for money laundering because any foreign company can buy property in the UK without having a presence in the country.

“Criminal funds can be concealed and made to look legitimate through an untraceable ‘company’ and subsequently the purchasing of property.

“When agents try to determine the true, or ‘beneficial’, owners, they find only documents listing shell companies.

“Furthermore, houses bought with laundered money often sit empty, taking homes away from the market that could be used for families and having a further negative impact on the wider community.

“To maintain integrity in our housing market it is vital to know who the ultimate owner of a property is.

“We look forward to working with Government to help implement this legislation.”

The consultation is here:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/727901/2._FINAL_Overview_document__1___1_.pdf

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