Criminals Use Housing Market for Money Laundering, according to Report
According to a recent report from National Crime Agency’s Economic Crimes Unit showed a recent spike in the receipts from a tax on homes purchased by companies, trusts or investment funds. In a report from theguardian.co.uk, this may be a clear indication that foreign criminals are using the London housing market to launder money illegally.
The conclusion was aired by Donald Toon, current director of the Economic Crimes Unit, after he saw that corporations are used by buyers to hide assets from taxing authorities in their home countries. These companies are based on offshore tax havens and the secrecy surrounding the operations of the companies allow them the ability to send money surreptitiously anywhere in the world and effectively avoid detection.
Toon, in an interview, said, “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.”
This was echoed in a report on independent.co.uk, where Toon said that the alarming number of homes registered to offshore corporations with layers of linked companies make it difficult to find the true owners of the properties purchased.
The recent spike in the little known ‘mansion tax’ triggered the statement. This levy is imposed upon properties in the UK owned by corporations, trust and investments. In the first quarter of 2015, the said levy had already accumulated £150 million. In 2013 to 2014, the tax had accumulated £100 million from 3,990 homes covered by the tax.
About eighty percent of the levy’s revenues were obtained from two exclusive London areas, namely Westminster City and the Royal Borough of Kensington & Chelsea. These two areas have seen prices jacked up by 28 percent since 2012. In purchasing homes here, criminals have been able to launder their ill gotten wealth and at the same time push up prices of homes in the area.
