The Magnitsky Clause Part 1: Profiting from the suppression of whistleblowers – what does it mean for business?
Press reports of this week’s Anti-Corruption Summit, hosted by David Cameron, coincided with the story of actress Emma Watson allegedly buying a UK property through a BVI company.
While investment in UK property through offshore companies is perceived as a principal means by which corrupt individuals seek to launder dirty money, Mr Cameron accepts that there are many legitimate reasons for corporate property investment. And Ms Watson’s advisers were at pains to point out that her purchase through an offshore company was for reasons of “anonymity and safety” rather than seeking financial advantage. Indeed, from a purely tax perspective, her investment though a company has no benefit whatsoever; quite the contrary.
Mr Cameron’s expressed commitment is to take measures to stamp out the “cancer” of corruption; addressing the laundering of money through corporate property purchase is a specific proposal.
UK companies have been required, since April, to keep a PSC register (“People with significant Control”). And a discussion paper published by the Department for Business, Innovation and Skills in March advocates transparency in the ownership of foreign companies investing in UK property. Its principal proposals that a foreign company would need to provide evidence of beneficial ownership as a prerequisite for being permitted to invest in UK real estate. In addition, and crucially, foreign companies that already own property in the UK will be forced to reveal their beneficial owners in a new public register; the Land Registry is already working on a dataset of UK properties registered to foreign companies
Should you have any questions about the issues raised in this blog, please contact Jim Sawer or a member of our private client team. You may also be interested in reading our other blogs relating to our private client work.
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