Foreign criminals use London housing market to launder billions of pounds

Corporations, usually based in offshore tax havens, are sometimes used by buyers keen to hide ownership of assets, says National Crime Agency spokesman

Foreign criminals are using the London housing market to launder billions of pounds, pushing up house prices for domestic buyers, a senior police officer has warned.

Donald Toon, the director of economic crime at the National Crime Agency, spoke after a spike in receipts from a tax on homes bought up by companies, trusts and investment funds rather than individuals.

Such corporations, usually based in offshore tax havens, are sometimes used by buyers keen to hide ownership of assets from their own countries’ tax authorities. The secrecy they offer can equally be used to squirrel away ill-gotten gains.

Toon told the Times: “I believe the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK.”

He spoke after provisional tax receipts showed the Treasury had made £142m from the annual tax on enveloped dwellings in just the first three months of the financial year.

The tax, introduced last year, is payable every year by companies that own a UK residential property valued above a certain amount. The City of Westminster and the Royal Borough of Kensington and Chelsea accounted for 82% of the revenue, but inflation at the top of the market is thought to ripple down to cheaper properties as wealthy buyers are pushed down the housing chain.

Toon’s comments come amid increasing concern that billions of pounds of corruptly gained money has been laundered by criminals and foreign officials buying upmarket London properties through anonymous offshore front companies. Experts say that London, with its myriad links to tax haven crown dependencies, is arguably the global capital of money laundering.

This month a Channel 4 investigation found that estate agents in Britain’s wealthiest postcodes are willing to turn a blind eye to apparent money laundering by corrupt foreign buyers. In the documentary, titled From Russia With Cash, two undercover reporters posed as an unscrupulous Russian government official called Boris in London to purchase an upmarket property for his mistress.

The couple viewed five properties ranging in price from £3m to £15m, on the market with five estate agents in Kensington, Chelsea and Notting Hill. Despite being made aware they are dealing with apparently laundered money, the estate agents agreed to continue with a potential purchase. In several instances the estate agents recommended law firms to help a buyer hide his identity.

The agents suggested that secretive purchases of multimillion-pound houses were common in the capital. One claimed that 80% or more of his transactions were with international, overseas-based buyers and “50 or 60%” of them were conducted in “various stages of anonymity … whether it be through a company or an offshore trust”.

The NCA was set up in 2013 as a British equivalent to the FBI. Its strategic assessment of serious and organised crime identifies the UK and crown dependencies as a destination for “billions of pounds of European criminal proceeds”.

It says: “It is known that millions of pounds from the proceeds of corruption and bribery offences committed by some international politically exposed persons have been laundered through UK financial systems and property investments.”

http://www.theguardian.com/uk-news/2015/jul/25/london-housing-market-launder-offshore-tax-havens

And before Tommy starts, foreign criminals Tommy, ie criminals from another country, domiciled in that country, don't live here and aren't immigrants. Comprende Vous?

It's been going on for years Sassy.

Back in January The Mirror reported there are over 635,000 homes standing empty in England alone -- that's enough to house a large city's worth of people!

And they are mostly owned by developers who buy them, then leave them standing there, hoping that they will deteriorate so that the Councils will give planning permission to knock them down and build something that they can charge a fortune for.

This is what makes me laugh so hard when I hear "we're full"

Ben_Reilly wrote:This is what makes me laugh so hard when I hear "we're full"

I'm sure all the kids stuck in B&Bs find it hilarious.

Ben_Reilly wrote:This is what makes me laugh so hard when I hear "we're full"

We are full.

There aren't enough houses for people - we see and experience this on a daily basis

Ben lives in Texas, plenty of room there, perhaps he could take a few!

nicko wrote:Ben lives in Texas,    plenty of room there,    perhaps he could take a few!

Unlikely, they want the blood of your first born in order to issue a tourist visa.

With 635,000 empty houses, the only thing making England "full" is the inability to actually let people live in those houses. That's not a "full" problem, that's a social injustice.

If we're going to drag Texas into this, well -- Texas has taken in nearly 3 million foreign-born residents since 1990. 16.5 percent of the Texas population is foreign-born, compared to 11.9 percent of the UK population.

I don't know what you mean about getting a visa, Nems, because this place is swarming with people from the UK.