A new analysis finds £5.9 billion worth of suspicious funds have been used to purchase UK properties through shell companies registered in Britain’s Overseas Territories.
Since 2016, the Transparency International UK organisation says it’s identified £11.1 billion of questionable funds invested in over 1,600 UK properties.
The organisation claims that the secrecy provided by these offshore financial centres makes them attractive to individuals seeking to conceal the ownership of assets.
It highlights in particular that 494 properties – worth £5.9 billion – were purchased using shell companies registered in the UK’s Overseas Territories. And of these, 475, worth almost £5.5 billion, were bought using entities in the British Virgin Islands.
In 2022, the UK introduced its Register of Overseas Entities, which requires overseas entities owning companies in the UK to publish the name of their beneficial owner. However, where the overseas entity is held via a trust, this information is currently exempt from publication.
Transparency International UK claims the scale of money in the UK property sector funnelled through Overseas Territories is just the tip of the iceberg.
Previous research by the organisation in 2018, using evidence from 237 corruption cases from the previous 30 years, found that shell companies registered in UK Overseas Territories had been involved in large corruption cases, inflicting £250 billion of economic damage across 79 different countries.
A spokesperson for the organisation says:“Corporate secrecy in the UK’s Overseas Territories plays a central role in enabling corruption, money laundering, and the evasion of tax and sanctions on a global scale.
“Our new research highlights the Overseas Territories’ role as global hubs for suspicious and illicit wealth. The secrecy provided by these jurisdictions have made them destinations of choice for corrupt individuals seeking to conceal criminal acts and enjoy the proceeds of their crimes with impunity. Greater transparency is essential to trace these financial flows, not only within the property sector but in the broader fight against corruption and money laundering.
“But as inaction from these jurisdictions continues, the Government should establish clear transparency standards for British Overseas Territories. At the very least, these should be in line with EU practice, granting journalists, researchers, and academics who can demonstrate a ‘legitimate interest’ full access to registers.”
