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UK property owners and the problems with offshore companies

Thousands of offshore companies with UK properties are still not publicly declaring their ultimate owners because secretive trusts, new data shows, control them.

About 18,000 companies have registered with the government’s new register of overseas entities, which was brought in to improve transparency about offshore property ownership. The deadline to sign up is this Tuesday.

However, at least 2,400 companies with UK property still do not reveal their beneficial owners because they are trusts based offshore.

The government exempted trusts when it brought in the public record, although the owners will have to give their details privately, which will be available to HMRC.

About 5,800 of the beneficial owners so far – about a third – are named as companies rather than individuals, with at least 2,412 of these appearing as trusts with no public information on the register about who is behind them.

The Guardian reported on Friday that more than 20 Conservative donors and a string of billionaire businessmen are among those who have so far declared they own UK property through offshore jurisdictions.

It shows that wealthy businessmen, Gulf royalty and states such as China have legally bought up billions of pounds of primarily London property, often via jurisdictions such as the British Virgin Islands (BVI) and the Channel Islands.

Stephen Abbott Pugh, head of technology for Open Ownership, a non-governmental organisation focused on beneficial ownership transparency, said the fact that so many of the offshore companies are declared as owned by other companies or trusts means “the public still aren’t able to discover the people behind those companies in many cases easily”.

“With access to many European beneficial ownership registers being shut off following a 2022 court ruling, the Register of Overseas Entities shows how useful public data is for tracking how offshore money is used to buy assets,” he said.”

Ray McCann, a former president of the Chartered Institute of Taxation and a former senior inspector at HMRC, said that owning property via an offshore entity no longer offers the same level of tax advantage in most cases due to changes in the law.

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