This article is more than 4 years old

This article is more than 4 years old

Offshore companies buying UK property could be forced to reveal their ultimate owners under plans being considered by ministers to crack down on tax evasion and money laundering.

The proposals would shine a spotlight on the foreign firms that hold billions of pounds in British property without having to declare who is behind them. It could also require foreign companies bidding for public sector contracts to do the same.

David Cameron is already forcing all UK companies to reveal their ultimate owners under the new plans for a register of beneficial ownership from June, so the plans would bring foreign owners of British property into line with those rules.

It comes after the Guardian and other global media organisations published the leaked Panama Papers from law firm Mossack Fonseca revealing how some of the world’s wealthy and powerful used offshore companies to hide their assets.

Following the leak, Cameron’s own financial affairs came under scrutiny after it emerged he had once invested in his late father’s offshore fund, which was a client of the law firm.

As he comes under political pressure over tax fairness, the prime minister is holding a global anti-corruption summit in London next month. The Times reported that he is expected to announce the new measures forcing transparency on foreign owners of UK property at this event.

The consultation document, published by the Department for Business, Innovation and Skills, said: “Property can provide a convenient vehicle for hiding the proceeds of crime. A recent study found that a quarter of solicitors’ firms surveyed had experienced clients attempting to use property transactions to launder money or commit fraud.

“UK property is in any case attractive to overseas investors due to the UK’s stable and open political and business climate. This also attracts criminal organisations and corrupt individuals who want a good investment and may also seek the badge of wealth and respectability that UK property ownership can bestow. The high values of property in London in particular presents an opportunity for criminals to launder considerable sums of money in one transaction.”

It comes as Theresa May, the home secretary, prepares to unveil an aggressive new set of powers to tackle money laundering and terrorist financing, including a new “unexplained wealth order”.

The wide-ranging legal powers to be detailed by May also include a new “illicit enrichment offence” to deal with public officials who have a “significant and inexplicable increase in their assets”.

The Home Office claims the action plan amounts to “the most significant change to the UK’s anti-money laundering and terrorist finance regime in over a decade”.

The action plan also comes in response to the first UK national risk assessment on money laundering and terrorist financing published last October. This found “significant intelligence gaps”, particularly in relation to high-end money laundering in major frauds and serious corruption cases where the proceeds are often held in bank accounts, property or other investments rather than cash.

A recent National Audit Office investigation found that £155m was collected in confiscation orders in 2014-15 from convicted criminals, but the total debt outstanding from confiscation orders stood at £1.61bn last September.

The action plan is designed to make Britain a more hostile place for those seeking to move, hide or use the proceeds of crime or corruption. The measures to be detailed by the home secretary as part of a six-week consultation include:

• The creation of unexplained wealth orders that will require those suspected of money laundering to declare their wealth.

• The provision of a linked forfeiture power to be used where the answers provided are unsatisfactory, or where the subject of an unexplained wealth order fails to respond.

• The creation of an illicit enrichment offence for use when public officials have a significant and inexplicable increase in their assets.

• New administrative power to designate an entity as being of money-laundering concern and require banks, law and accountancy firms to take special measures when dealing with them.

• Fundamental reform of the system of suspicious activity reports to improve the way the banking and financial sectors report suspect transactions to the National Crime Agency.

• A new power to allow money held in bank accounts to be swiftly seized and forfeited.



The home secretary said the new powers were needed because Britain’s world-leading financial system was at risk of being undermined by money laundering, illicit funding and the funding of terrorism.

“This action plan sends a clear message that we will not tolerate this type of activity in our financial institutions,” said May.

“We will forge a new partnership with industry to improve suspicious activity reporting, deliver deeper information sharing and take joint action on enforcement. And we will act vigorously against the criminals and terrorists responsible, to protect the security and prosperity of our citizens, and safeguard the integrity of Britain’s financial economy.”



There were more than 354,000 suspicious activity reports submitted in 2013-14 to the National Crime Agency, the vast majority of which came from the financial sector.

