Police are failing to uncover the true scale of money laundering in the lucrative UK property market because investors' identities are being concealed through offshore tax havens, official data shows. Figures released by London's Metropolitan Police to anti-corruption NGO Transparency International reveal for the first time that its Proceeds of Corruption Unit (POCU) has investigated the ownership of just 144 properties with a total value of 180 million pounds ($277 million) in the UK since 2007. The head of the Met's corruption unit believes this figure represents the "tip of the iceberg," however, because more than three quarters of the properties are registered via offshore tax havens to hide their owner's identities, obstructing UK police investigation. Much of the capital is held in accounts in the British Overseas Territories.
At least 122 billion pounds worth of property in England and Wales is held through companies registered in offshore tax havens, according to a 2014 analysis by the Financial Times. Land registry data analyzed by Transparency International shows that one in 100 London properties are registered to offshore companies — enough to cover more than 2.5 square miles of real estate. In the borough of Westminster alone, nearly one in 10 properties are registered in offshore tax havens.
More than a third of foreign company-owned properties are registered in the British Virgin Islands. The rest are registered in Jersey (14 percent), the Isle of Man (8.5 percent), Guernsey (8 percent), Panama (3.4 percent), and unknown locations (2.5 percent). The British Virgin Islands is the most popular tax haven for London investors. Local legislation grants offshore companies complete secrecy over the identity of owners, directors, and shareholders. Properties owned through companies registered there are also exempt from capital gains taxes, succession taxes, and stamp duties. Politically stable and with a familiar judicial system, creating an offshore company there takes less than 48 hours.