In a bid to tackle the use of offshore schemes to avoid tax, the Government has announced plans to create a register of all the ultimate owners of UK property via offshore companies.
The Department for Business, Energy and Industrial Strategy wants the register to detail who owns overseas companies and other vehicles that own property in the UK.
According to the Government, the move would help promote the country’s reputation as a place of corporate transparency and anti-corruption.
“More than £122 billion of property in England and Wales is owned by offshore firms,” says John Penrose MP, the Government’s anti-corruption champion.
“If they’re clean and reputable, fine, they’ll have nothing to fear. But if murky shell companies have bought British property with plundered or laundered cash, we don’t want them here.”
His views are backed by Business Secretary Greg Clarke, who says the register will “build on our reputation for corporate transparency as well as helping to create a hostile environment for economic crimes like money laundering.”
A criminal hit list
However, some experts actually believe the list could result in the Government helping criminals.
“What is extremely concerning is the inference in the Government’s announcement that this register will be publicly available,” says Gary Haynes, head of private clients at tax advisors RSM.
“The use of offshore companies to acquire property in the UK is not solely for tax, or even criminal, reasons.
"Celebrities not wanting a stream of paparazzi camped outside their house, those with wealth, who perhaps live in politically unstable countries under fear of kidnapping and attack, vulnerable persons and a wide range of politically exposed individuals would all prefer not to have the precise location of their home in the UK revealed.”
Haynes fears that the register could fall into criminal hands who could use the information to target those properties.
“The UK already suffers from title theft, where fraudsters assume false identities to pass off as property owners, enabling them to offer security for a loan or sell the property to third parties,” he adds.
"This list could mean those properties are targeted for title theft or burglary.
"The Government’s intention – to continue to target tax evasion and criminal activity – is a good one, but the register should not be made public.
“A public register will drive those seeking security for themselves and their families, to invest their monies elsewhere in the world, where this can still be achieved.
"By all means have a register, accessible to specified authorities, but there seems to be no justification for handing the criminal underworld a new set of data for them to find their targets,” concludes Haynes.