The creation of a public register showing exactly who owns UK property via offshore companies could be a criminals’ charter, handing the underworld a ‘hit’ list of where celebrities and the ultra-wealthy live.
The criticism has come from tax expert Gary Heynes, of RSM.
He said that the register, due to be created by 2021, would provide criminals with a ‘hit’ list.
The Department for Business, Energy & Industrial Strategy has announced the Government’s intention to create the register.
The intention is to crack down on tax evasion and money laundering, whereby ill-got money is channeled through offshore companies to buy property in the UK – often seen as a safe haven for dirty money.
The UK register would be the first in the world.
But Heynes said: “What is extremely concerning is the inference in the Government’s announcement that this register will be publicly available.
“The use of offshore companies to acquire property in the UK is not solely for tax, or even criminal, reasons.
“Celebrities not wanting a stream of paparazzi camped outside their house, those with wealth, who perhaps live in politically unstable countries under fear of kidnapping and attack, vulnerable persons and a wide range of politically exposed individuals would all prefer not to have the precise location of their home in the UK revealed.”
He went on: “The UK already suffers from title theft where fraudsters assume false identities to pass off as property owners, enabling them to offer security for a loan or sell the property to third parties.
“While the Government is right to seek to clamp down on tax evasion and criminal activity, a public register which reveals highly confidential information is not the way the way to go about it.
“Such a register will drive those seeking security for themselves and their families, to invest their monies elsewhere in the world, where this can still be achieved.
“By all means have a register, accessible to specified authorities, but there seems to be no justification for handing the criminal underworld a new set of data for them to find their victims.”
However, Michael Harris, director of financial crime compliance at LexisNexis Risk Solutions, said the proposed register would be a “landmark move in bolstering the UK’s defence against financial crimes like money laundering and tax evasion”.
He said: “At the moment, there’s only data available on half of the owners of London land titles which are owned by overseas entities.
“The introduction of a foreign owner’s property register will look to solve this issue by ensuring the identity of the ultimate beneficial owners of such real estate is known.
“However, agents in the property industry must also take it upon themselves to conduct thorough due diligence checks and ensure that the identity of the ultimate beneficiary is known.
“With a clearer view of who the ultimate owners of properties are, it will be easier to paint a picture of any suspicious ownership.”