As the war in Ukraine prompts increasing scrutiny over the influence of Russian ‘dirty money’ in the UK, new data obtained by The Ferret has led to calls for councils to ban tax haven landlords from letting property altogether. Critics have also called for urgent reform of the landlord register to bring more transparency.
Scottish Government guidance has warned West Dunbartonshire Council and other local authorities – who are responsible for vetting landlords – that the private rented sector is attractive to criminals as a “means of laundering money through property ownership and management.”
Our investigation, involving cross-referencing the landlord register with freedom of information requests and a database of Scottish offshore property, found that hundreds of flats were being let from owners registered in tax havens.
We found that 1460 homes in Glasgow are linked to landlords registered in jurisdictions named in a top 10 corporate tax haven ranking, produced by the Tax Justice Network.
In one case, the only contact available for a Glasgow city centre flat on the landlord register was a PO box address in Dubai, pictured here.
The Ferret determined that the same flat was owned by a company registered in the British Virgin Islands, where it is not possible to identify the beneficial owner. We also identified a letting agency that is ultimately controlled from Dubai. According to the landlord register, it acts as the agent for a portfolio of rental properties in the city. Many of these properties are owned through a separate Bahamas-based firm.
Although the letting company has a similar name to the Bahamas-based property company, there is no way to establish whether they have the same beneficial owners using the information publicly available. There is also no way to determine who has invested in the offshore property firm, or whether the two firms are controlled by the same people.
Both landlords and letting agents must be assessed by a council as “fit and proper” before they can be put on the landlord register. But Scottish Government guidance currently assumes that the process will not be “onerous” and largely relies on self-declaration.
Tax evasion and money laundering are recognised as legitimate reasons to strike a landlord off the register.
West Dunbartonshire Council refuses to give any information on this to The Ferret. The full story is on The Ferret website
More significantly how many companies, land banks, country estates are owned in offshore locations.
Out in more understandable ways, how many care homes have ultimate ownership companies registered off shore. Or how many well known housing development companies have associated off shore tax have companies owning development land and selling it to the development company thereby allowing profits to be delivered offshore rather than paying tax here.
Or of the insurance companies who set up insurance captives in tax have offshore jurisdictions.
Yep, yep yep, 4,000 homes is only the thin end of a very much thicker wedge. And a good thing that ordinary people don’t know about this. We wouldn’t want folks to know the extent of tax evasion as they’d only worry.