Wealthy Russians are trying to swap their luxury properties in London for multimillion-pound homes in Dubai as they seek innovative ways to circumvent financial restrictions imposed since the full invasion of Ukraine.
A list of properties including a Knightsbridge mansion worth £34mn and a three-bed Eaton Square apartment with an £8mn asking price has been circulated in recent weeks by high-end real estate agents operating in the Gulf emirate.
They are being offered by Russians who are willing to barter their London properties for a new residence in Dubai, while avoiding bank transfers and financial scrutiny, according to people involved in the transactions. Prospective buyers are being offered deep discounts on the UK properties to complete the deals. The mooted house swaps are the latest workaround on behalf of rich Russians who have found themselves frustrated by the western financial system since Moscow’s invasion of Ukraine on February 24.
About 1,000 individuals and companies have so far been hit with sanctions, with others facing additional checks as well as difficulties navigating money transfers and opening bank accounts. But there were doubts in Dubai over how a deal would be structured, and whether any United Arab Emirates residents would risk such an exchange. “I’m very sceptical that this can work, there’s just too much documentation to provide in London,” said one businessman in Dubai who was shown the list by a real estate agent. “But it goes to show the lengths they’re willing to go to evade the financial system.”
One Dubai-based lawyer said difficulties would arise because any transaction would need to account for stamp duty and other fee liabilities in both jurisdictions. Yet others said that as long as the Russian seller was not under sanctions, such transactions could be structured effectively if purchase agreements were signed at each end. “This is perfectly legitimate,” said another lawyer in Dubai.
