A report due out this month will look at the role of estate agents in the fight against international terrorism.
The Government is planning to publish its first national risk assessment of money laundering and terrorist financing.
The report will specifically look at estate agents.
Its publication will come after a new tax on expensive homes owned by corporate entities as opposed to individuals yielded almost five times more than expected by HMRC.
Owners of residential property that buy and hold the home through a corporate structure can keep their identities secret.
In March 2012, Stamp Duty Land Tax of 15% was introduced for buyers of £2m-plus properties bought by corporate entities – individual buyers paid far less, at 7%.
The £2m threshold was lowered to £500,000 in the December 2014 reforms.
Owners of residential property that buy and hold the home through a corporate structure can keep their identities secret.
The tax windfall has alerted the National Crime Agency to the extent of anonymous home ownership in the UK.
While estate agents, along with other businesses, have a duty to report suspicions of possible money laundering, the level of reporting looks to be extremely low: just 179 reports out of 354,186 came from agents in the year to last September.
However, while anonymity around property ownership draws suspicion, there are legitimate reasons to hold property through corporate structures.
Estate agents have also often pointed out that they do not handle money, although letting agents do. There has also been considerable muddle over the duty to check out “clients” – in other words, sellers, rather than buyers.
Yet according to one newspaper: “Hundreds of billions of pounds classified as the proceeds of crime are laundered here every year and London’s surging property market is one of the more attractive ways to do it, according to the UK National Crime Agency.
“Real estate’s role in laundering money is ‘not one we understand well enough by any stretch of the imagination’, said Donald Toon, director of the NCA’s economic crime unit.
“We’re not saying that money laundering is endemic in the property market, but we are saying it looks like there’s a problem here.”
There’s more in an interesting report in the Lebanon Daily Star here
I hope the Government can provide clear advice to Estate Agents which is currently as clear as mud. However the responsibility to ensure purchase funds are ‘clean’ lies entirely with those handling the funds – the banks and solicitors – not Estate Agents.
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I really do despair! I provided these departments with an effective means to identify both money laundering and tax evasion through property. To be reading this two years down the line simply beggars belief. There simply isn’t a polite way to describe how political posturing and departmental egos are the biggest barrier to governmental progress and how it seems civil service job protection is the highest item on the agenda.
As an example given the chance by midnight on April 6th I could tell HMRC exactly how much to the penny revenue they could expect in from bona fide UK landlords and Identify where property rental is being used for tax evasion and money laundering whether crime, drugs or terrorism, domestic or foreign.
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Our business has not had a need to report ML as yet, but to quote another local agent “have you ever tried to report possible money laundering? It’s nearly impossible!”
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Actually it is very easy. Your in house ML officer should have the contact details for the paperwork…. you have followed the ML guidelines? If you haven’t got guidelines you may want to get them asap as you are in breach of the regulations if operating without them.
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Another good reason for us agents to do our money laundering checks properly. We had the same problem trying to do a SAR but still worry about those agents that got heavily fined for not doing their checks.
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I did hint about this some months ago and the web only portals are in a for very rude awakening. It will be interesting to see how many of them will be able to stay in business without a face to face verification system in place.
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