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Thousands of offshore companies owning properties in the UK had not declared their real ownership on a new government register by a deadline of Tuesday night, despite the threat of sales restrictions and fines for non-compliance
The British government launched the register in August — six years after it was first pledged by former prime minister David Cameron — to help tackle an estimated £100bn of illicit financing channelled through the UK, often via property.
The register has established that various billionaire businessmen and multiple Conservative donors have declared they own UK property through offshore jurisdictions.
In addition the register has exposed criminals using overseas companies to launder money, the government said.
The business department cited the example of Ruja Ignatova, the “cryptoqueen” who is on the FBI’s most wanted list since her OneCoin business turned out to be a pyramid scheme.
She has now been publicly declared the beneficial owner of two intermediaries in Guernsey as a result of the new requirements, revealing her ownership of a four-bedroom £13.5mn penthouse in London.
But only 19,510 out of a total of 32,440 registered overseas organisations had declared their beneficial owners by the deadline of Tuesday night.
The government does not know how many of those organisations have not made declarations simply because they have been dissolved or struck off, although officials believe it could be up to a tenth of the total. Another 5,000 are said to be “pending application” and could soon join the total figure.
The new register, which requires previously anonymous foreign owners or buyers of UK property to reveal their identities, was set up through a new economic crime bill last spring that was fast-tracked after Russia’s invasion of Ukraine.
Any new purchase involving anonymous foreign buyers must now disclose the beneficial owners to Companies House before any application can be made to the UK’s various land registries. Meanwhile all retrospective purchases of properties and land by anonymous overseas entities in England since 1999 had to be entered into the register by Tuesday night.
The government said the register had been “invaluable” for the tax and revenue service, bringing transparency to overseas-based structures and halting the flow of money from non-compliant individuals.
Lord Callanan, business minister, said: “There is nowhere for the criminals and corrupt elites to hide. We will be using all the tools at our disposal, including fines and restrictions, to crack down on foreign companies who have not complied.”
Yet thousands of offshore companies are still not declaring their ultimate owners because they are controlled by secretive offshore trusts — which are exempt from the need to go on the public register even if their owners have to make their details available privately to the authorities.
According to data taken from Companies House at the end of December and analysed by research organisation Open Ownership, the majority of overseas companies — around 8,500 — had listed an individual as their beneficial owner and just under 4,000 named a corporate entity.
According to the data, the majority of overseas entities owning UK property were based in the British Virgin Islands, an offshore tax haven.
At the end of December, some 2,800 companies had said they were based in the BVI, followed by Jersey and the Isle of Man. Fewer than 250 companies were based in the Seychelles, Hong Kong or Gibraltar.
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