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Offshore owners of British property to be forced to reveal names
- Nasrudith 8y agoI can't help but think the law is silly in proscribing jail sentences to /unknown overseas people/ for being unknown. For misrepresentation sure - that is pretty much another form of fraud but otherwise a seizure by default on the grounds of no valid registered root owner makes more sense personally.
- jeffwass 8y agoIt’s about time, this has been a serious issue in the UK. I think it was the BBC that did a program a few years ago with an undercover reporter pretending to be a corrupt Russian government official buying London real estate to launder their stolen gains. The undercover reporter would go to see various flats with intent to purchase, and “admit” to the sales agents flat-out that he worked for a Russian health care office, processing billions of pounds worth of funding, and siphoned a little off for himself. He’d then say he needed to know how to close on a property in such a way to hide his true identity. Without fail every single realtor gave him advice how to set up a shell company or which law firms he could contact that would do it for him by not asking all the required questions. Even after the BBC called those estate agents and law firms to say they were duped, that the buyer was an undercover reporter, and if they had any comment, most refused to even acknowledge any wrongdoing. Despite the undercover buyer clearly indicating the funds were stolen.
- flatfilefan 8y agoIt sounds like there is more to this story than just some companies (or corrupt officials behind them) buying and selling the property in London. Could it be that US has found out many Russians seem to own property in UK but there is no way to coerce them in any other legal way?
- toyg 8y ago> US has found out many Russians seem to own property in UK Nah, it has been widespread knowledge for decades now. When Roman Abramovich bought Chelsea FC in 2003, the phenomenon was already well-known. London has been Oligarch Central pretty much since the Eltsin days. No, the real issue is that the UK government continues to struggle under public debt. Since 2010 they've cut every expense they can cut, so now they're trying to raise taxes. One of the avenues for new revenue (eh) is to close all the well-documented tax-code loopholes; and the most classic one is where you create Company X from a tax haven, make it buy property in London, then sell the whole company, bypassing all taxes that should be triggered by property sales. That's what this new law is really supposed to fight. It's actually not a terrible idea, and I say that as someone who actively despises the current government. Obviously it will likely end up favouring the sort of old-money connections that the Tory party naturally represents, people who cannot hide their wealth because they've literally owned most of the country for centuries; but if it brings home some much-needed cash and stems a bit the relentless flow of dirty money that keeps London fat and arrogant, so be it.
- ghshephard 8y agoI wonder if you could combine that approach (having property owned by a company in a tax haven) with Prop-13 (in which property taxes grow very slowly if the property is not sold), and if anyone has ever done an assessment of how much property in California is owned by such entities.
- google_censors 8y agoFinCEN is doing that in the larger metropolitan areas but they aren't publishing the data. They've been looking into real estate money laundering in the US on a larger scale for the past couple of years.
- iaw 8y ago> "A ban on a foreign entity selling or leasing a property without declaring its beneficial owner, with jail of up to five years and an unlimited fine for those failing to comply" Is there going to be a mechanism to prevent straw man beneficiaries?
- namibj 8y agoWell, that the straw man could liquidate the asset, I assume.
- rahimnathwani 8y agoYeah, and face 'liquidation' himself.
- namibj 8y agoI think your argument is orthogonal to this issue and therefore moot. If you can explain why that is not the case, please do so, I would like to understand it.
- rahimnathwani 8y agoThe straw man can in theory liquidate the asset but, in practice, is prevented from doing so by the risk of harm to himself or his family.
- namibj 8y agoYes, sure, always. But the payoff is huge...
- krageon 8y agoWhat, maybe a million or two for the cost of not being able to live inside the social circle where you've always existed? You're basically on the run for the rest of your life and have to practice the strictest security online for fear of being found by accident by someone who might want to kill you. Held against the risks and potential future you might gain in the best case, I think you can say the payoff is tiny.
- lifeisstillgood 8y agoThis feels like a Brexit dividend - no seriously hear me out - the normal conduct of government business is so snarled up with Brexit that almost nothing can get through - so despite lobbyists, it seems good ideas with clear benefits get through simply because government has to do something - and the simplest clearest actually obvious ideas are the only ones everyone can understand in the time acaikable
- flatfilefan 8y agoThis isn't the government though, it's the legislation, isn't it?
- lemoncucumber 8y agoAmericans commonly use the phrase "the government" to refer to any or all of the branches of government, not just the executive branch. Guessing the comment you're replying to was written by an American.
- wavefunction 8y agoAmericans also use "legislature" to refer specifically to the legislative branch of our and other governments responsible for drafting legislation, which certainly does not draft nor pass itself into law.
- celticninja 8y agoThe legislation is proposed by the government, as they have a majority is is usually expected that it will pass due to their majority but it is not guaranteed, depending on how controversial it is and how much of a majority they have. legislation can also be proposed by individual MPs. In this situation this new legislation was introduced by the government.
- flatfilefan 8y ago"to end the UK’s reputation as a high-risk jurisdiction for money laundering" hm, shouldn't it be "low-risk"?
- noddy1w 8y agoAnyone think it is reasonable to predict plummeting high end real estate prices and a further pummelled pound as demand dries up and motivated sellers dump properties and sell pounds here?
- flatfilefan 8y agoI just wonder what is the bigger story behind this anyway? I have come across this study that claims that UK has the largest net debt to other EU countries. [1] There is significant amount of debt that is "mutual" within the EU in that it could be "canceled out" (I.e. UK owes Germany, Germany owes Italy, Italy owes UK) So here is the result: http://econ.anthonyjevans.com/2012/08/eu-debt-write-off/writeoff_after/ http://econ.anthonyjevans.com/2012/08/eu-debt-write-off/writ... UK €460Bln, Italy €204Bln ... Germany €108Bln, France just €1Bln. So this clearly shows that UK might indeed profit from the devaluation of pound. Is UK so far on the debt spiral that has to do it? Thus Brexit? [1] https://www.cobdencentre.org/2011/05/how-much-eu-debt-can-be-written-off-through-cross-cancellation/ https://www.cobdencentre.org/2011/05/how-much-eu-debt-can-be...
- lurker456 8y agoThat's only if UK's debt is in pounds and without provisions for currency fluctuations.
- closeparen 8y agoIt’s already well known that real estate is used this way; are specific names going to change that? Maybe if they did something to actually prevent such investment.
- TheCoelacanth 8y agoThe only people who benefit from inflated property values are rent-seekers. I see decreasing property values as just another benefit of this policy.
- tonyedgecombe 8y ago
- ionised 8y agoIt is worth remembering that the UK was the only EU nation to try diluting/blocking wide-reaching legislation to combat tax havens: https://www.theguardian.com/world/2015/jun/18/uk-reject-eu-plans-combat-multinational-tax-avoidance https://www.theguardian.com/world/2015/jun/18/uk-reject-eu-p... https://www.theguardian.com/business/2017/nov/26/british-government-accused-of-being-soft-on-tax-avoidance https://www.theguardian.com/business/2017/nov/26/british-gov... https://www.independent.co.uk/news/uk/politics/paradise-papers-tax-avoidance-eu-tax-haven-blacklist-uk-blocking-a8043881.html https://www.independent.co.uk/news/uk/politics/paradise-pape... https://medium.com/the-jist/uk-vs-eu-tax-evasion-investigation-f15643a647a3 https://medium.com/the-jist/uk-vs-eu-tax-evasion-investigati... Whatever the UK does to look like it is addressing the issue of tax avoidance, it's exactly that; pure theatrics. The UK, my own country (or at least its wealthiest citizens) is a huge beneficiary of offshore schemes and complication tax arrangements.