Offshore owners of British property to be forced to reveal names

https://www.theguardian.com/business/2018/jul/23/offshore-owners-of-british-property-to-be-forced-to-reveal-names

by nextstep486 • 8 years ago

120 50 8 years ago

Nasrudith2• 8 years ago

I can't help but think the law is silly in proscribing jail sentences to /unknown overseas people/ for being unknown. For misrepresentation sure - that is pretty much another form of fraud but otherwise a seizure by default on the grounds of no valid registered root owner makes more sense personally.

webkike• 8 years ago

It's jail time and an unlimited fine. This guarantees that people who remain anonymous despite this law will have their property seized.

IshKebab• 8 years ago

You mean prescribing?

Nasrudith2• 8 years ago

Err whoops - proscribing would be forbidding good catch.

jeffwass3• 8 years ago

It’s about time, this has been a serious issue in the UK.

I think it was the BBC that did a program a few years ago with an undercover reporter pretending to be a corrupt Russian government official buying London real estate to launder their stolen gains.

The undercover reporter would go to see various flats with intent to purchase, and “admit” to the sales agents flat-out that he worked for a Russian health care office, processing billions of pounds worth of funding, and siphoned a little off for himself.

He’d then say he needed to know how to close on a property in such a way to hide his true identity. Without fail every single realtor gave him advice how to set up a shell company or which law firms he could contact that would do it for him by not asking all the required questions.

Even after the BBC called those estate agents and law firms to say they were duped, that the buyer was an undercover reporter, and if they had any comment, most refused to even acknowledge any wrongdoing. Despite the undercover buyer clearly indicating the funds were stolen.

flatfilefan4• 8 years ago

It sounds like there is more to this story than just some companies (or corrupt officials behind them) buying and selling the property in London. Could it be that US has found out many Russians seem to own property in UK but there is no way to coerce them in any other legal way?

toyg• 8 years ago

US has found out many Russians seem to own property in UK

Nah, it has been widespread knowledge for decades now. When Roman Abramovich bought Chelsea FC in 2003, the phenomenon was already well-known. London has been Oligarch Central pretty much since the Eltsin days.

No, the real issue is that the UK government continues to struggle under public debt. Since 2010 they've cut every expense they can cut, so now they're trying to raise taxes. One of the avenues for new revenue (eh) is to close all the well-documented tax-code loopholes; and the most classic one is where you create Company X from a tax haven, make it buy property in London, then sell the whole company, bypassing all taxes that should be triggered by property sales. That's what this new law is really supposed to fight.

It's actually not a terrible idea, and I say that as someone who actively despises the current government. Obviously it will likely end up favouring the sort of old-money connections that the Tory party naturally represents, people who cannot hide their wealth because they've literally owned most of the country for centuries; but if it brings home some much-needed cash and stems a bit the relentless flow of dirty money that keeps London fat and arrogant, so be it.

JumpCrisscross• 8 years ago

the BBC that did a program a few years ago with an undercover reporter pretending to be a corrupt Russian government official buying London real estate

Would you happen to have a link?

jeffwass3• 8 years ago

I think it was this one - “From Russia With Cash”. On Channel 4, not BBC.

https://www.theguardian.com/uk-news/2015/jul/07/london-estat...

Key quote about the motive for estate agents turning a blind eye to the clear admission of fraud :

“Behind the deals, claims the documentary, lie easy profits for estate agents. If “Boris” had gone ahead with the purchases they stood to earn between £65,000 to £315,000 in commissions.”

ellius• 8 years ago

Not to nitpick, but if I remember correctly at least one of the realtors did become uncomfortable and shut down the whole thing. He was the exception, though.

scurvy• 8 years ago

It would be great if they did this in Miami, too.

google_censors2• 8 years ago

I keep hoping that FinCEN's investigations actually start leading to some prosecutions. https://www.miamiherald.com/news/business/real-estate-news/a...

cascom• 8 years ago

So let's say the buyer didn't go running his mouth about stealing the money, and didn't lie about who the beneficial owner was, how exactly is having his name as the beneficial owner of a property going to stop money laundering?

james10713• 8 years ago

The UK authorities have the power to ask people to explain where their money came from.

So, if a former Russian public official is revealed to be the owner of a £10m property in London, he is at risk of having it confiscated.

iaw• 8 years ago

"A ban on a foreign entity selling or leasing a property without declaring its beneficial owner, with jail of up to five years and an unlimited fine for those failing to comply"

Is there going to be a mechanism to prevent straw man beneficiaries?

namibj3• 8 years ago

Well, that the straw man could liquidate the asset, I assume.

rahimnathwani2• 8 years ago

Yeah, and face 'liquidation' himself.

steve19• 8 years ago

I am sure that is impossible short of making all property owners sign some sort of legal declaration that they are the real owner and the property is not encumbered in any way. But given how many middle men and woman these people are already willing to pay to hide their identity, I am sure they would find all sorts of ways around that.

lifeisstillgood• 8 years ago

This feels like a Brexit dividend - no seriously hear me out - the normal conduct of government business is so snarled up with Brexit that almost nothing can get through - so despite lobbyists, it seems good ideas with clear benefits get through simply because government has to do something - and the simplest clearest actually obvious ideas are the only ones everyone can understand in the time acaikable

flatfilefan4• 8 years ago

This isn't the government though, it's the legislation, isn't it?

lemoncucumber• 8 years ago

Americans commonly use the phrase "the government" to refer to any or all of the branches of government, not just the executive branch. Guessing the comment you're replying to was written by an American.

celticninja• 8 years ago

The legislation is proposed by the government, as they have a majority is is usually expected that it will pass due to their majority but it is not guaranteed, depending on how controversial it is and how much of a majority they have. legislation can also be proposed by individual MPs.

In this situation this new legislation was introduced by the government.

flatfilefan4• 8 years ago

"to end the UK’s reputation as a high-risk jurisdiction for money laundering" hm, shouldn't it be "low-risk"?

ska• 8 years ago

depends which side of the table you sit on....

olefoo• 8 years ago

The City of London is a notorious tax-haven and seems to have created a bubble of jurisdictional exemption around itself.

noddy1w• 8 years ago

Anyone think it is reasonable to predict plummeting high end real estate prices and a further pummelled pound as demand dries up and motivated sellers dump properties and sell pounds here?

flatfilefan4• 8 years ago

I just wonder what is the bigger story behind this anyway? I have come across this study that claims that UK has the largest net debt to other EU countries. [1] There is significant amount of debt that is "mutual" within the EU in that it could be "canceled out" (I.e. UK owes Germany, Germany owes Italy, Italy owes UK) So here is the result: http://econ.anthonyjevans.com/2012/08/eu-debt-write-off/writ...

UK €460Bln, Italy €204Bln ... Germany €108Bln, France just €1Bln.

So this clearly shows that UK might indeed profit from the devaluation of pound. Is UK so far on the debt spiral that has to do it? Thus Brexit?

[1] https://www.cobdencentre.org/2011/05/how-much-eu-debt-can-be...

lurker456• 8 years ago

That's only if UK's debt is in pounds and without provisions for currency fluctuations.

closeparen• 8 years ago

It’s already well known that real estate is used this way; are specific names going to change that?

Maybe if they did something to actually prevent such investment.

TheCoelacanth• 8 years ago

The only people who benefit from inflated property values are rent-seekers. I see decreasing property values as just another benefit of this policy.

tonyedgecombe3• 8 years ago

It's unfortunate for those caught with negative equity.

ionised• 8 years ago

It is worth remembering that the UK was the only EU nation to try diluting/blocking wide-reaching legislation to combat tax havens:

https://www.theguardian.com/world/2015/jun/18/uk-reject-eu-p...

https://www.theguardian.com/business/2017/nov/26/british-gov...

https://www.independent.co.uk/news/uk/politics/paradise-pape...

https://medium.com/the-jist/uk-vs-eu-tax-evasion-investigati...

Whatever the UK does to look like it is addressing the issue of tax avoidance, it's exactly that; pure theatrics.

The UK, my own country (or at least its wealthiest citizens) is a huge beneficiary of offshore schemes and complication tax arrangements.

Offshore owners of British property to be forced to reveal names

Related Stories