Advisers have raised concerns about a new public register which will reveal who owns property in the UK.
The property ownership register would detail the owners of overseas companies and other entities that own or buy UK property. The Government, which last year asked for suggestions of how the index could be delivered, said it was part of its “drive to build a fair economy”.
It said the move would strengthen the UK’s position as a world leader in corporate transparency and anti-corruption. At the heart of the proposals is the desire to clamp down on money laundering and tax evasion.
While the proposals have been mooted for several years, it is now understood that draft legislation will be accelerated so it is published this summer, with the system expected to be in place by 2021.
If it goes ahead, the UK would be the first country to implement such a register, but some commentators have raised concerns about the proposals.
Nimesh Shah, partner at Block Rothenberg, said: “The government has never had an accurate understanding of who owns what and this lack of transparency has led to suggestions that UK property has been historically used as a mechanism for widespread tax evasion and money laundering.
“While this may be the case in a minority of situations, there are very good reasons why someone – whether they live in the UK or abroad – might not want others to know they own a particular property.”
He added: “So far there are no details about what data will be included. The main concern around the introduction of a public register will be privacy, which could result in possible threats to individuals’ families and homes, and who will have access to the register.
"Will it be limited to government authorities or will it be truly public?’
Gary Heynes, head of private client at tax advisers RSM, said the proposals are a bad idea which could provide criminals with information they need to target victims.
He said: "What is extremely concerning is the inference that this register will be publicly available.
"The use of offshore companies to acquire property in the UK is not solely for tax, or even criminal reasons.
"Celebrities not wanting paparazzi camped outside their house, those with wealth, who perhaps live in politically unstable countries under fear of kidnapping and attack, vulnerable persons and a wide range of political exposed individuals would all prefer not to have the extent of their assets revealed, and especially not the precise location of their home in the UK."
While Heynes agreed the government needs an understanding of the movement of monies through the UK, he said the idea of whether the public should have access to this data was "highly questionable".
He said that tax avoidance using offshore companies for UK property has largely been addressed.
He added: "For reasons of security, privacy remains highly valued by all and, while the government is right to clamp down of tax evasion and criminal activity, a public register which reveals highly confidential information is not the way.
"By all means have a register, accessible to respected authorities, but there seems little need to provide the criminal underworld with a new set of data for them to find their victims."
But Adrian Lowcock, investment director at Architas, said the information itself isn't damaging, "so it's better to know what is going on in the property market than remain uninformed".
"Of course there is a risk of abuse but there is the chance of that happening irrespective of where the information is made available. Ultimately, this would allow the Government to create more meaningful and targeted policies around property ownership."
