Unexplained Wealth Orders
What is an Unexplained Wealth Order?
Enacted in the Criminal Finances Act 2017, an Unexplained Wealth Order (UWO) is a court order compelling individuals to disclose the sources of their unexplained wealth, potentially obtained through criminal activity.
Am I at risk of receiving an Unexplained Wealth Order?
UWOs can be issued against anyone believed to hold an interest in the property, including family members uninvolved in the original purchase. They are retrospective and mandatory, with non-compliance leading to a presumption that the property is proceeds of crime.
Consider hypothetical scenarios:
- A client’s child studies in the UK, owning a Ferrari without visible income. Can they prove the source of funds for their lifestyle?
- A house is part of a family trust, and if a spouse or child is served with an order, can they identify the source of funds and disclose the entire trust structure?
- A client with a modest salary has additional legitimate income sources. To what extent would they disclose all financial affairs if required to do so?
How are Unexplained Wealth Orders obtained?
UWOs are obtained secretly and without notice. The High Court may grant a UWO if specific conditions are satisfied, including property worth over £50,000 and suspicion of insufficiently explained lawful income.
Upon receiving a notice, what are my obligations?
Failure to comply results in a legal presumption that the property is proceeds of crime, leading to potential confiscation. Providing false information is a criminal offense.
Can I do anything to mitigate receiving an order?
Preparation is key. Families may conduct a precautionary review of assets to assess risk and consider improvements. Those acquiring assets in the UK may seek advice in advance.
What our unique experience has taught us
As XT 24, we defended the first two UWOs obtained on February 28, 2018. Our unparalleled experience reveals a broad interpretation of Politically Exposed Person (PEP) designation, raising concerns about the lack of suspicion or proof of criminal involvement.
The UWO is a highly disruptive and intrusive tool, posing a direct threat to privacy, security, and reputation. Families with wealth understandably seek to protect against its dramatic impact.
If you have concerns or need more information about XT 24 and our Criminal Litigation, Investigations, and Regulatory services, please contact a member of the team who will be able to assist.