Free trial Sign-up

Please leave your name and email and we'll be in contact shortly.



Contact Number


Please complete the sum:        
29 + 4 =

Blog 2: What are HMRC Looking for?

25th January 2019

The Money Laundering Regulations require estate agents to risk assess their business relationships and apply an appropriate level of investigation to ensure that they understand who their customer is, and why they are involved in the transaction.

In its guidance ‘Anti Money Laundering Supervision: Estate Agency Businesses’ HMRC outline agents should have a process in place to

assess the risks that your business may be used for money laundering or terrorist financing, and put in place appropriate measures to manage and lessen those risks. (3.1)

In our second blog, Director of Agency Services, Ben Robinson, considers how agents could be identifying money laundering risk in their business.

What are HMRC looking for?

Money launderers come in all shapes and sizes. It’s easy to think this a London-centric issue and primarily because of foreign investment but the reality is money laundering happens everywhere.

The challenge is identifying the red flags and risk.

These red flags are fluid depending on your own business and circumstances. Ultimately the Money Laundering Regulations 2017 require estate agents understand who their customer is, and why they are involved in the transaction.

Although in most cases this will be reasonably self-evident, you are required to have process in place for assessing whether the individual and/or transaction is being carried out for the purposes of money laundering. This Risk Assessment should be completed on every transaction.

This process informs the level of due diligence you undertake to verify the individual and/or transaction. HMRC talk about taking a “risk-based approach”… in other words, where there is a low risk you conduct a thorough but lesser level of investigation than a high risk check, where you would be required to demonstrate that you applied greater scrutiny before proceeding.

To help identify where an individual and/or transaction could pose a risk we’ve produced a brief outline of indicative red flags. These are not hard and fast rules, rather transactions that display any of the characteristics outlined below may be considered to medium or high risk.

Business Source

  • Unusual introducer
  • Direct approach where reason for contact questionable
  • Proximity of the party to estate agent and/or their legal representation – if there is a distance, why?

Seller Characteristics

  • Absent owner or landlord
  • Owner/seller living abroad
  • Recently issued (new) ID documents/driving licence etc
  • Seller’s lack of knowledge about the property
  • Where the seller lives at a different address from the property and has no documentary evidence such as bills or buildings insurance schedule linking seller to the property
  • Proximity of a signatory to the witness – if there is a distance, why? What is the relationship between the signatory and the witness?
  • Email contact (remote client)
  • Sole proprietor
  • Long-time owners (high equity)
  • Use of intermediaries to conduct the transaction
  • Difficulty in identifying beneficial owners through complicated legal entities

Buyer Characteristics

  • Buyers you do not meet or are reluctant to meet
  • Difficulty in conducting Customer or Enhanced Due Diligence
  • Foreign investors/ buyers living abroad
  • Property has not been inspected prior to purchase
  • Value of the purchase is apparently beyond their means, with no satisfactory explanation of source of funds
  • Proximity from estate agent and/or legal representation – if there is a distance, why?
  • Use of intermediaries to conduct the transaction
  • Where you have an existing relationship, the transaction is different from the normal business of the customer

Property Characteristics

  • Empty
  • Tenanted
  • Unencumbered (no mortgage)
  • High value
  • Unregistered
  • Where there is no restriction on the register to comply with

Other Characteristics

  • Quick sale required
  • Quick, back to back sale (increased price)
  • Funds going abroad or to an unusual destination
  • End of chain transaction
  • Value of property is unusually low without a good/plausible and verified reason

In our final blog we’ll consider how to put together your risk assessment and what steps you can put in place to ensure you comply with the Money Laundering Regulations 2017.

For more information about how to understand the risks posed by money laundering


Find out more



The client and experts view...

  • thumb1
Latest newsspeech Bubble

System Maintenance

Please be aware that we are performing some system maintenance this weekend. We don’t anticipate that this will result in any downtime of our services, but we apologise if it does cause any inconvenience

Government Confirms New Regulations and Qualifications for Estate Agents Will Happen

The government has accepted the proposals of the Regulation of Property Agents (RoPA) with wide-spread consequences for estate and letting agents.

The proposals reach right into the heart of the industry to affect regulation, training and licensing.



Fears of Tougher Regulations and Unjust Costs Mount Ahead of Government Announcement

Estate Agents are waiting for the big reveal on Monday after Lord Best has admitted some firms could close when the regulation of property agents (ROPA) makes its recommendations to the Government early next week.

Lord Best, the chair of ROPA, has already outlined the working group’s desire for more regulation.


[NEWSFLASH] Agent Charged DOUBLE Over AML Registration Mistake

Property Industry Eye (PIE) has highlighted the case of an estate agent who has fallen foul of HMRC and been charged double.

On 4th April, with plenty of time to spare, Hayman-Joyce renewed their annual HMRC registration. They paid the fee and thought they’d ticked all the boxes.


Compliance in a Box: The Natural Remedy for Your AML Headache

Estate agents around the country are realising that the new 5th AML Directive goes deep. There’s a lot of work involved in becoming compliant. And the penalties for non-compliance, either deliberately or through confusion, are severe. (more…)

newsletter sign-up

Sign up for our e-newsletter

Email Address

trial sign-up

Click the Apply button opposite to use our software on a trial basis...

  • etsosnews

  • etsosnews

  • Linkedin Twitter Facebook
    This site uses cookies. Find out more about this site’s cookies.