Law to reveal foreign owners may apply 20 years retrospectively

It is claimed by Propertymark that the government’s Economic Crime Bill - to be debated in the House of Commons today - may apply retrospectively in order to identify Russians as part of the government’s bid to exert sanctions on that country.

The government has brought forward MPs’ scrutiny of the measure - formally called the Economic Crime (Enforcement and Transparency) Bill - in the light of the Russian invasion of Ukraine. 

It is thought it will introduce a register of overseas entities that highlights the owners of international companies owning properties and land in the UK. However, analysis by agents’ body Propertymark suggests that changes of procedures by Companies House may still take many months to impact those currently under scrutiny.

Propertymark says: “A beneficial ownership register would mean that anonymous foreign owners of property within the UK would have to reveal their identities and could no longer hide behind shell companies.

“The register is likely to apply retrospectively, including property bought by overseas nationals, up to 20 years ago in England and Wales and since 2014 in Scotland. Entities that do not declare the beneficial owner could face restrictions on selling property or up to five years in prison.

“The legislation also makes it easier for Unexplained Wealth Orders (UWOs) to be issued by authorities, which means that properties may be seized without having to prove to a legal standard that they were gained through criminal activity.”

Propertymark has long supported proposals for transparency of ownership through a public register to go hand in hand with Money Laundering Regulations, to avoid criminal funds being concealed, and has made suggestions to the UK Government on how this could best be implemented.

The mainstream media has reported that the number of UK property owners with a principal address in Russia reached 1,127 in August 2021, according to the Land Registry responding to Freedom of Information requests.

The campaigning organisation Transparency International estimates that 100 London properties worth £1.1 billion are owned by Russians accused of corruption or links to the Kremlin.

It is thought by some that a lack of transparency over identifying the legal and beneficial ownership of companies and properties could be aiding offences such as tax evasion and money laundering, as well as hiding the assets of those who would come under any sanctions.