UK launches property register to curb flow of £100bn ‘dirty money’

A new register will be launched on Monday to highlight the ultimate owners of overseas companies that control land in the UK — six years after it was first announced by former prime minister David Cameron.

The new register is designed to help tackle the estimated £100bn a year of illicit financing that the National Crime Agency believes is channelled through the UK annually.

The new register will require anonymous foreign owners or buyers of UK property to reveal their identities to ensure that criminals cannot hide behind secretive chains of shell companies. It is designed to help the government uncover Russian oligarchs — or other kleptocrats — using UK land to hide their illicit wealth.

Downing Street brought forward legislation designed to crack down on the flood of “dirty money” into Britain in the wake of Russia’s invasion of Ukraine, with parliament passing a new economic crime bill in March.

From Monday, any new purchase involving anonymous foreign buyers must now disclose the beneficial owners, with verified information, to Companies House — before any application to the UK’s land registries can be made.

There will be a six-month grace period for already-owned properties bought over the past 23 years.

In England, any retrospective purchases since 1999 of properties and land by anonymous overseas entities must also be entered into the register by the end of January next year. For Scotland, all such deals since 2014 must be recorded, while in Northern Ireland the register will not be retrospective.

Those who do not declare their beneficial owner will face restrictions over selling their property and up to five years in prison. There are also fines of up to £2,500 a day — equivalent to £912,500 a year — for failure to make accurate disclosures.

Lord Callanan, business minister, said the new register would “flush out corrupt elites” and “lift the curtain on those criminals attempting to hide their illicitly obtained wealth”.

In theory, the register only applies to instances where an entity owns more than 25 per cent of a property, in line with international norms.

But Callanan said that where an individual tried to avoid scrutiny by dividing ownership of a property — for example with four children — they would still be considered responsible for full disclosure. “You cannot use that as a device to get around that . . . you are still the person with significant control of that business so you could still be subjected to fines.”

In addition, the measures mean that any overseas entity that has sold properties since February 28, 2022 will still have to provide a statement to Companies House.

Louise Smyth, chief executive of Companies House, described the launch of the register as a “significant milestone” in tackling economic crime.

James Gilbert-Green, an estate agent working on £20mn-plus deals in London, said the register would make life harder for buyers who wanted to fly under the radar but was unlikely to stem the flow of overseas wealth into the capital.

“Is it going to help uncover secret owners? Maybe in some very rare instances. But it is actually very, very hard to buy in the UK if you are dodgy,” he said.

Banks, lawyers and estate agents have been more effective gatekeepers in recent years, he added. The introduction of anti-money laundering checks on sellers in 2014 and a new requirement for estate agents to run compliance checks on buyers in 2018 have effectively pulled up the drawbridge for dirty money, he said.

Roarie Scarisbrick, a high-end property agent in London, said the new register was “more of a change for the existing owners of special purpose vehicles rather than new buyers. You have to make a decision: do you want your name out there or not?”