Foreign companies who own UK properties will have to reveal their ultimate owners on the world’s first public register, or face up to five years in prison.
The new draft laws aim to prevent criminals from illegally profiting from some of the UK’s most exclusive properties through the use of overseas shell companies.
The register, which forms part of a wider crackdown on criminals laundering their dirty money in the UK, aims to make it easier for law enforcement agencies to seize criminal funds.
The penalties include a ban on any foreign entity selling or leasing property without first publicly declaring its beneficial owner. An individual found to have committed this offence could face up to five years in prison and an unlimited fine.
Individuals who fail to register overseas entities when instructed, or who knowingly try to deceive the register, face up two years in prison and an unlimited fine.
A survey from the government suggests nearly three-quarters of people working in the UK property market agree the new register will lead to an increase in transparency and will reduce the potential for illegal activity.
“The UK is known around the world for its open and dependable business environment and this reputation is maintained by keeping under review our required high standards,” said Business Minister Richard Harrington.
“That is why we are introducing the world’s first public register which will expose the ultimate owners of overseas shell companies, giving authorities the information, they need to come down on criminals who launder their dirty money through the UK’s property market and to seize the proceeds of crime.”
Harrington added that while the vast majority of foreign companies which buy property in the UK do so legitimately, the register will help to ensure the UK “remains a great dependable place to work, invest and do business”.
The register follows the introduction of the Criminal Finances Act 2017, part of the government’s Anti-Corruption Strategy, which provides new powers such as Unexplained Wealth Orders to law enforcement agencies to help them seize the proceeds of crime.
More than £2 billion of criminal assets have been recovered under the Proceeds of Crime Act, while the government has recovered more than £3 billion extra since 2010 through recovery under additional powers.