London’s tax haven homes: Tens of thousands of properties owned by shady foreign organisations

Is London the world’s leading money-laundering destination?

Official data has revealed that over 40,000 properties in London are owned by foreign companies, of which 90% are based in tax havens.

The laws in tax havens such as the British Virgin Islands mean that the ownership information is concealed.

The result is that there are questions over exactly what the owners of these tens of thousands of London properties are keeping hidden, and why.

The research, by the non-profit group Transparency International, says that Scotland Yard has only investigated purchases of 144 properties since 2004, but also highlights the difficulties the police face in probing dubious property purchases.

“It can take years to unpick the layers of corruption and secrecy which ultimately result in the purchase of UK properties,” the report says.

It adds that Scotland Yard can struggle to gain the support of governments who may be able to help them, or that other countries’ police services are too ill-equipped to offer useful assistance.  

The report found that almost one in 10 properties in the City of Westminster (9.3%), 7.3% of properties in Kensington & Chelsea, and 4.5% in the City of London, are owned by companies registered in an offshore secrecy jurisdiction.

According to the Financial Times, there are concerns that high-value London properties are becoming an increasingly attractive means of transmuting illegally begotten funds into usable legal assets.

The paper quotes DCI Jon Benton of the Proceeds of Corruption Unit, who said: “In nearly all the grand corruption cases we investigate, we find . . . proceeds of corruption being used to purchase high-value properties.

“Properties that are purchased with illicit money, which is often stolen from some of the poorest people in the world, are nearly always layered through offshore structures,” he added.

Robert Barrington, executive director of Transparency International, said that the UK has “sleepwalked” into becoming one of the most desirable destinations for corrupt capital in the world.

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Readers' comments (5)

  • We need wealthy individuals who want to live in our country and spend their money on high value properties, provide investment and jobs as well as spending money in our economy. Surely even the most left wing biased journalist can understand that.

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  • Hi David,

    You are right. All the things you mention can be incorporated into a healthy, functioning society.

    The issue is the growing number of secretive foreign firms buying property with corrupt money. This is bad for London, bad for the property market and bad for business.

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  • Hi Harry
    It is very difficult, if not impossible to judge, let alone legislate for what is corrupt and what is not. Would you for instance stop the President of a country or international sports organisation from buying a house in London? Or even a certain ex Prime Minister buying another mansion in central London. You could not possibly run a society that made judgements like that.

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  • Hi David, thanks for replying.

    Again, I agree with you. I would imagine it is very difficult to unpick which purchasers are scrupulous and which are criminals. It must be a huge burden on the police.

    So there clearly needs to be a rethink over laws that allow purchases of homes through companies registered in an offshore secrecy jurisdiction.

    I should also add that I am merely reporting the findings of an investigation, I do not claim to have all the solutions to providing Londoners with a property nirvana.

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  • Is London the world’s leading money-laundering destination?

    Yes.

    We have banks that will happily facilitate money laundering and tax avoidance on an industrial scale, laws that allow it all to be kept secret and routed through off shore tax havens, a Revenue that refuses to investigate or prosecute and a Government that actively supports these crooked activities.

    Many of these properties are kept empty for capital gain by individuals who have no interest in living in the UK. The resultant upward pressure on house prices, not only in London but all over the UK, is a major scourge on living standards.

    There is no reason for the secrecy other than to cover up wrongdoing.

    The good can be sorted from the bad with one simple move - an end to secret off shore tax havens. Simple as that.

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