Unexplained Wealth Orders

This is a freeview 'At a glance' guide to unexplained wealth orders.

HMRC can require a person to explain the source of their wealth by applying to the High Court for an Unexplained Wealth Order (UWO). Where an application is granted by the High Court assets can be seized.

This power derives from Chapter 1 of Part 1 of the Criminal Finances Act 2017 which was introduced from 31 January 2018. These provisions have been extended by Economic Crime (Transparency and Enforcement) Act 2022 (ECTE22).

An application for a UWO will be granted by the High Court if:

• There are reasonable grounds for suspecting that the known sources of lawful income would be insufficient to obtain the property in question.
• There are reasonable grounds for suspecting that the property in question was obtained through unlawful conduct (added by ECTE22).

The application will need to specify:

• The property in respect of which the order is sought.
• The person HMRC (or other enforcement authority) thinks owns it, ECTE22 extends the definition of person to include responsible officers such as directors.
• The UWO requires the person to provide a statement:
  • Setting out the nature and extent of their interest in the property.
  • Explaining how they obtained it (including how any associated costs were funded).
  • If held in trust, details of the settlement.
  • Such other information that may be so specified.
  • It may also require the provision of associated documents.
• The order must state
  • The form and manner of the statement above.
  • The person to whom the order is to be given.
  • Where it is to be given to the person (or the address to which it will be sent).
• The time limit for response will be specified by the Court.
• At the same time as applying for a UWO, the enforcement authority may apply for an interim freezing order which would prevent the person receiving the UWO from selling the asset in question, ECTE22 allows the High Court to extend the length of this freezing order.
• The Act does not provide any specific means of challenging the issue of an UWO.
• ECTE22 also stops the High Court from granting costs orders against the enforcement authority unless it has been unreasonable or dishonest.

If the person does not comply with the order, the property will be presumed to be eligible for recovery under Part 5 of the Proceeds of Crime Act 2002. False statements can be prosecuted and may be subject to imprisonment and/or a fine.

UWOs in action

The National Crime Agency secured the first UWOs under this legislation in February 2018, they covered two properties worth £22m believed by a 'politically exposed person'. The challenge to the order was dismissed by the High Court.

Useful guides on this topic

Foreign Currency
This guide provides a brief overview of the taxation of foreign currency. It is a complex area, with specific circumstances giving different results. 

External link

Criminal Finances Act 2017 Part 1 Chapter 1

Economic Crime (Transparency and Enforcement) Act 2022 Part 2

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