In a significant breach of new anti-money laundering regulations, the true owners of nearly 45,000 British properties, collectively valued at £190 billion, remain concealed from public knowledge. Experts argue this situation represents a widespread disregard for the laws established to curb illicit financial activities.
The Economic Crime Act, enacted in March 2022 shortly following Russia’s invasion of Ukraine, mandates that foreign property owners in the UK disclose the ‘beneficial owner’ of their properties by January 31, 2023. The law defines ‘beneficial owner’ as any individual who possesses or controls an overseas company holding property in the UK.
This legislation was designed to prevent foreign criminals and those under international sanctions from using the UK, particularly London, as a safe haven for their assets. However, the effectiveness of these measures has been questioned, prompting calls for the government to reinforce the rules.
Concern over the loopholes in enforcement intensified late last year when it was revealed that Ali Ansar, an Iranian businessman aged 56 and under sanctions for his alleged support of the Islamic Revolutionary Guards Corps (IRGC), managed to acquire several luxury properties across Europe, including a mansion in London.
The IRGC, notorious for its harsh repression of domestic protests, is a primary target in ongoing military actions by the US and Israel within Iran. This revelation underscores the urgent need for stringent oversight to prevent sanctioned individuals from exploiting legal gaps to secure assets in the UK.
The IRGC has been at the forefront of violently suppressing protests against the regime and is being heavily targeted in the current American and Israeli strikes in the country.
By forcing overseas property owners to identify themselves by name, the law was intended to make it harder to buy homes or business buildings in the country to launder money or park ill-gotten gains.
While the law was backed by the threat of fines and criminal prosecution, research suggests there is evidence it is being flouted.
Tax Policy Associates examined a Land Registry list of 97,978 properties registered to offshore companies in England and Wales, before checking how many had disclosed their ultimate owners with Companies House – as legally required.
The think tank found that it was impossible to find the beneficial owner of 43,401 of the properties, equivalent to about 44 per cent.
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The most expensive house on the overseas owners register is Richard Branson’s former home in Holland Park, which was acquired for £53m in 2016 by a BVI company
This Belgravia property was acquired for £16million in 2017 by a BVI company. The registered beneficiary is a Singapore corporate trustee
Late last year it emerged that 56-year-old Ali Ansar, an Iranian businessman sanctioned for allegedly financing Iran’s Islamic Revolutionary Guards, had been able to buy a string of luxury properties across Europe – including a London mansion
A boat firing a missile during a recent IRGC training exercise in the Gulf
In these cases, the property owners had either not registered at all, registered the property but claimed to have no beneficial owner, or given the owner as another offshore company or a trust.
There is no suggestion every case is a breach of the law, as some companies legitimately do not have one beneficial owner.
However, Dan Neidle, a former tax lawyer who runs the think tank, believes some property owners are deliberately obscuring their ownership.
‘Some of this will be accidental, but the evidence suggests that a significant proportion is intentional,’ he writes.
‘Some people are just not registering. Others are registering offshore companies as beneficial owners, rather than the individuals who really control the property.
‘And over a fifth of all properties are held by trusts that fail to declare the true owner.’
Mr Neidle believes some of the properties could be used for money laundering or sanctions busting.
Other owners may be failing to register their properties to avoid capital gains tax when they sell, he claims.
‘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 tax expert adds.
An apartment in this building on Horse Guards Avenue was sold to a Cypriot company for £21million in 2023
This second Holland Park property was bought for £21million in 2016 by a Bahamas company, with the beneficiary listed as a Cayman Islands trustee
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The most common location for overseas structures holding English and Welsh property is Jersey, a self-governing, low-tax crown dependency.
A total of 3,234 properties linked to the Channel island are shown as having no beneficial owner, followed by 1,165 on the British Virgin Islands, 753 on the Isle of Man and 685 on Guernsey.
The nation with the highest proportion of unregistered owners is Saudi Arabia, with 234 out of 252 properties (92.9 per cent) not listed.
Most properties with no overseas beneficial owner are in London, with the capital accounting for £107billion of the £188billion of property in England and Wales where owners have not been properly declared.
Many are residential properties owned by trusts.
The most expensive house on the overseas owners register is Richard Branson’s former home in Holland Park, which was acquired for £53m in 2016 by a BVI company.
The second just around the corner, was bought for £21million in 2016 by a Bahamas company, with the beneficiary listed as a Cayman Islands trustee.
An apartment on Horse Guards Avenue was sold to a Cypriot company for £21million in 2023. The beneficiaries are two individuals who work for Cypriot firms, who represent an unknown person.
An apartment in this building in Mayfair was bought for £20million in 2021 by an Isle of Man company, with the beneficiary listed as an Isle of Man trustee company
A second apartment, in Mayfair, was bought for £20million in 2021 by an Isle of Man company, with the beneficiary listed as an Isle of Man trustee company.
A third, in Belgravia, was acquired for £16million in 2017 by a BVI company. The registered beneficiary is a Singapore corporate trustee.
There is no suggestion of wrongdoing relating to any of the properties above.
A government spokesman said: ‘We will look at this report carefully as part of our commitment to fighting illegal financial activity through the Register of Overseas Entities.
‘Companies House can issue warning notices and impose financial penalties on overseas entities that fail to register or comply with ongoing requirements, and these entities are prevented from selling, leasing or raising finance over their land until they comply.’
