London Property a Haven for Money Laundering

Over £70 billion worth of homes in England and Wales are now ‘owned’ by firms registered in off-shore tax havens – and that risks turning the countries into havens for “dirty money from around the world” according to an analysis by the Financial Times.
London is of course the capital of this kind of buying activity. “From Abacha to Marcos and the Gaddafis, corrupt leaders have used shell companies and trusts to hide their identities and safeguard stolen fortunes, often in property” the FT is told by Robert Barrington, executive director of Transparency International UK, a body monitoring global transactions.

Nearly two thirds of the 91,248 properties in England and Wales owned by foreign-based companies are linked to the British Virgin Islands and Channel Islands; most of the homes are in London, and 27 per cent by value are in the borough of Westminster alone.

The FT’s research says that regulations designed to prevent money laundering theoretically oblige agents and solicitors to carry out due diligence when conducting a sale. But while the Land Registry states the title of the company holding property, it can be difficult to determine who is the ultimate owner.

“When you have a company hidden offshore, it is I think almost impossible for your average estate agent to find out what on earth is going on,” Peter Bolton King, global residential director at RICS, tells the newspaper. “You have to make a professional judgment whether you are satisfied with the information that you are provided with.”

The FT report notes that the late Libyan dictator Muammar Gaddafi’s son Saadi owned a trophy house in London valued at £10m, and that one of the most prized houses in the capital – Witanhurst, a 65-room mansion overlooking Hampstead Heath – is owned by an offshore consortium registered in the British Virgin Islands. ·