New Planned UK Public Register – A Risky Move for Buyers? 

12.02.18

The scaremongering has begun in earnest – with certain property industry experts warning that the planned introduction of a public register in 2021, compelling foreign companies which own or buy UK property, to disclose their ultimate owners, could put the safety of property buyers at risk.

London property has, and will, continue to attract foreign buyers thanks to its mix of top-end apartments, luxury penthouses and gleaming skyscrapers. Corporations use the city as global hub. But the release of the “Panama Papers” in 2016 helped shine a light on firms and individuals who use complex structures to base themselves abroad, putting the issue of tax avoidance at the top of the global agenda.

Since 2004, Britain has launched criminal investigations into more than 180 million pounds’ worth of real estate suspected of being linked to corruption, with over 75% of properties still being looked into using offshore secrecy.

Currently, for any investor of European property, the fund sources of all transactions have to be reviewed by lawyers in a process called “know your customer”. If an individual opens a bank account, the bank is also required to know the trace source of all funds. Revealing the identities of buyers however, it is argued, won’t serve the register’s intended purpose.

Carrie Law, chief executive of Juwai.com, a Chinese international real estate portal comments: “This is a ‘world-first’ in terms of a named register and will build on the UK’s reputation for corporate transparency as well as helping to create a hostile environment for economic crimes like money-laundering. That said, property ownership should be protected like tax data. Authorities can monitor it, act on it, and release statistical summaries to the public, but individuals’ information should be protected from abuse by keeping it confidential.”

Ms Law has a point. London is an international crossroads where activists, politicians and business persons from around the world have homes. Many authorities, for example, Russia, might use this data to help them pursue enemies, for example political foes who have sought refuge from unfair prosecution.

For others - the new system is a step in the right direction, increasing transparency and targeting acts of money laundering and funds with unknown sources.

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