Anti-Money Laundering (AML) Supervision: Property Sourcing

Lately we’ve been speaking with an increasing number of clients who engage in property sourcing, or the likes of, where they’re essentially acting as a middleman to facilitate a property sale.

If your trade sounds similar to this, then you may not realise you need to register for anti-money laundering supervision.

Who needs to register for Anti-money laundering (AML) supervision?

You could be a sole trader, acting as consultant to help connect buyers and sellers, or you could operate a limited company that sources suitable land for clients to purchase.

If this sounds like you, then you will be deemed to be an Estate Agent for Anti-money laundering purposes.

You will need to ensure you register for AML supervision with HMRC – scarily, it is a criminal offence if you don’t comply with registration!

You can find out more about registration here.

I’m a property sourcer – how do I register for AML Supervision?

You can follow the link here to sign up and manage your money laundering supervision with HMRC.

When you sign up, there a few different fees that you’ll need to pay:

1. A registration fee of £300 ‘per premises’. This premises will be your office or home address if you trade from there.
2. A ‘Fit and Proper Test’ fee of £150 per person. Depending on your trade, you may not need to pay this one. You’ll only need to apply for this test if you’re transmitting or taking money as an intermediary between buyer and seller.
3. An approval process fee of £40 per person. This process will confirm you don’t have any relevant convictions that prohibit you from engaging in the transaction.

Thereon, you’ll need to renew your supervision annually for a fee of £300.

There are fee reductions available for small business with a turnover of less than £5,000.

What happens if I don’t register?

Now with all the associated fees you could be tempted to take a chance and not comply, however as stated already, it is a criminal offence to not register if you are required to.

Failure to comply with the Regulations would mean you could face civil penalties or criminal prosecution.

This could result in unlimited fines and/or a prison term of up to two years.

You can find information on penalties via HMRC’s website.

What will my responsibilities be?

Once registered, you will have additional responsibilities to ensure that you verify the identities of your clients. HMRC have provided a Proof of identity checklist for companies, partnerships and individuals. You’ll need to ensure you’re conducting appropriate Customer Due Diligence (CCD) before you engage in a new transaction.

It is also important to know where source funds are coming from, for example how your buyer is planning to purchase any land/property you’re sourcing for them, to ensure they’re not the profits of criminal activity or from High-risk third countries where additional checks are required.

As you can see there are a range of responsibilities you may not have previously considered when working as a property agent or sourcer, all which carry very serious consequences for non-compliance!

If you’re unsure about your responsibilities and whether this article applies to you, then please contact Darren Hughes by email or call us on 01634 731390

Our services

If you would like to find out more about some of our services that might help you please take a look at our related pages:

Property Investors & Developers

Business Growth Services 

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Take a look at our other blogs on the topic of property

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The content in this blog is correct as at 1st June 2023. See terms and conditions.