Offshore: Margate

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When the Land Registry released a treasure trove of data to Private Eye on property held by offshore companies, it promptly kicked itself. The data had been released “in error” after an FOI request, it said*. It wouldn’t be doing more of the same. No sirree.

Hey diddly. A good chunk is out in the open and ‘Eye, along with data visualisation expert Anna Powell-Smith, put together a nifty interactive map so you can peruse the property near you held by quasi-anonymous companies in exotic tax havens.

I finally had a chance to have a butcher’s at my particular neck of the woods. Whaddaya know, Margate High Street alone is a minor hive of offshore ownership by obscurely named trading companies.

And there’s a good smattering more across Thanet and East Kent.

“Prithee, where precisely, Mister?” I hear you ask. Well, the freeholds for numbers 78, 64-66, 52, 44 and 24 High Street are respectively owned from the Seychelles, Eire, Panama, Isle of Man and Malta, for starters.

A little stretch of the legs away, you have ‘College Square shopping centre’ Hawley Street, bought by Jersey-registered Lionwalk Jersey Ltd for £26,650,000, ‘The Centre’ (below), bought for £2,510,000 by Lunar Retail S.A.R.L. from Luxembourg and more…

 

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“The Centre”, Margate. Owned by a fund registered in tax haven Luxembourg.

Don’t make the foolish mistake of thinking this is illegal. Nor of confusing these cunning owners with the hardscrabble current occupants of said properties.

Many of these minor offshore renegades may also be perfectly nice people; just ones with a libertarian streak, reluctant to hand over their hard-earned cash to a government likely to spunk it on management consultants and bombing Syria.

And although they are more likely than not dodging capital gains tax, inheritance tax and stamp duty, they may be better landlords than the innumerable slum landlords registered here in Blighty. But that’s by the bye.

Houston, free riding aside, we have a massive problem and it is this: appalling opacity.

Buy British property through a company registered in a tax haven and nobody will have the foggiest who the real owner is. The company can be registered by your lawyers. The real, ‘beneficial’ owner is concealed. 

Want to be extra careful? Have this company own another company registered in another tax haven and so on, ad infinitum, before one of these shell companies actually forks out for a London mansion or, erm, a shop on Margate High Street. 

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Britain’s property market – wildly overinflated by government fillips and rock bottom interest rates – serves as one of the world’s best sources for laundering filthy money. Astonishingly, there is no national strategy for tackling high-end money laundering.

As the National Crime Agency (NCA) put it in December last year: “There is a contrast between the current response to the laundering of organised criminal gang-linked street cash, which is relatively well understood and addressed, and high end money laundering, where there is no comprehensive response.”

In July, Donald Toon, the NCA’s director of economic crime command, warned that foreign criminals are driving up house prices. And a report by the EU-funded Organised Crime Portfolio, published this year, documented how organised crime groups invest widely in real estate across Europe — particularly in the UK.

“Purchasing UK properties is one of the cheapest and easiest money-laundering techniques in the world — there are not many others where you actually make money on rising asset prices,” David Buxton, chief executive of Arachnys, told the FT.

Offshore London: a screengrab from Private Eye's map.

Offshore London: a screengrab from Private Eye’s map.

Following a Transparency International report that made all of these points, our porcine Prime Minister started saying he’ll launch a consultation on whether to require offshore ownership of British property to be made public.

A million offshore flowers continue to bloom and nobody, including the myriad Tory donors who run their business affairs from offshore, will give what is known technically by their lawyers as a flying monkey fuck, because there are no indications whatsoever that pressure will be mounted to ensure the beneficial owners are also revealed.

As for a consultation? All the Prime Minister actually needs to do is read the quinquennial review of the Land Registry. This was conducted by former Treasury official Andrew Edwards in 2001, and he did a cracking job. (It’s 600+ pages but worth a read). Naturally, his punchier recommendations were roundly ignored.

He started by noting that even without the offshore issue, registered owners of land and property are “under no obligation at present to enter their true names on the Register. Land and properties can be registered under any name that the owner chooses. His thoughts on this are worth repeating verbatim:

The ability of owners to register land and property under names which conceal rather than reveal who they are flies in the face of the principle which Parliament established in the Land Registration Act 1988. That Act opened the Land Register to public inspection from 2 December 1990. Parliament clearly intended that the ownership and extent of all properties should be in the public domain.

In these days when economic crime and money laundering have become major issues for the world economy and society, and when property assets are a significant vehicle for holding the proceeds of crime, the fact that the Registry neither records on the Register nor knows who the true owners of property are becomes ever harder to defend.

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Sign Transparency International’s call for reform here.

Browse your local (recently registered only) offshore property holdings here.

Remember that the Conservatives still want to privatise the Land Registry. Here, in brief, is why that is a truly abysmal idea. Here is the Law Society saying it in slightly more depth.

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