Investigation reveals widespread hidden ownership is exposing estate agents to significant anti-money-laundering penalties.
2nd Feb 20261 748 1 minute read Simon Cairnes
Almost 45,000 UK properties worth an estimated £190bn are owned through offshore structures where the true beneficial owner cannot be identified, creating a significant AML compliance risk for estate agents, according to Tax Policy Associates.
Its findings come from analysis of offshore-owned property listed on the Register of Overseas Entities at Companies House. In around 44% of cases, the tax think tank says it was impossible to establish who ultimately owns or controls the property.
Mass breachTax Policy Associates’ Founder, Dan Neidle (pictured), believes that the scale of hidden ownership is likely to be part of a “mass breach” of the rules designed to prevent UK property being used to launder illicit funds, evade tax or circumvent international sanctions.
He says the level of non-compliance could not be dismissed as administrative error alone, as a “significant proportion is likely to be intentional.”
The analysis shows ownership is being obscured in several ways. In some cases, overseas entities failed to register at all. In others, they claimed to have no beneficial owner, listed another offshore company as the owner, or named a trust without identifying the individuals who ultimately control or benefit.
While trusts can legitimately hold property, Neidle adds, it is common for lawyers or accountants to be listed instead of the real owners.
It’s very important we get to grips with this, from a tax evasion perspective as well as the more obvious sanctions-busting and money-laundering ones.”
The issue is heavily concentrated in London, which accounts for around £107bn of the estimated hidden property value. Large numbers of properties are linked to offshore structures based in Jersey, the British Virgin Islands and parts of the Middle East.
According to Neidle: “It’s very important we get to grips with this, from a tax evasion perspective as well as the more obvious sanctions-busting and money-laundering ones.”
With tens of thousands of properties lacking a clearly identifiable beneficial owner, the scale of hidden ownership exposes estate agents to falling foul of AML rules. As was reported in The Neg, HMRC enforcement data shows 170 penalties have been issued to estate agents, with fines totalling £835,842, for breaches of anti-money-laundering rules.
TagsAML compliance 2nd Feb 20261 748 1 minute read Simon Cairnes Share Facebook X LinkedIn Share via Email