Michael Gove has pledged to shut down the “racket of illicit money” from Russian oligarchs who use remaining loopholes to buy and sell vast homes under a cloak of anonymity.
Draft legislation produced by the housing ministry sets out new powers that would require any company, trust or other entity involved in a property transaction to provide the Land Registry with details of its true beneficial owner in order to complete a purchase or sale.
The move is designed to help turn a corner on the use of Britain as a haven for billionaires seeking to launder illicit cash or discreetly store up vast assets.
It goes further than existing plans to create a register of “beneficial” owners of foreign companies, and means details of the individuals behind any body, including trusts, would have to be revealed in order to conclude a property transaction.
Homes transferred to trusts
There has been frustration in the government that some Russian oligarchs appeared to have avoided sanctions being imposed on palatial UK homes by transferring them into trusts.
Mr Gove told The Telegraph: “Sunlight is the best disinfectant, and for too long the property market has been in the shade. The only question asked when property is purchased in this country has been ‘how much’, and now we will be asking ‘who is this property actually for’ and ‘where has this money come from’?
“We want to shut down the racket of illicit money that has flooded through the British property market once and for all. Our property market will no longer be open to corrupt individuals and regimes laundering their money and hiding their identities.”
The Levelling-up and Regeneration Bill contains powers allowing Mr Gove to draw up regulations requiring those involved in property purchases and sales to provide the “details of the parties to a transaction”, “details of persons on whose behalf or for whose benefit the parties to a transaction are or were acting “and” details of the source of any money paid or other consideration given in connection with a transaction “.