Crime and Policing Act 2026 - POCA Part 2: amount to be paid under a confiscation order
The Crime and Policing Act 2026 introduces significant reforms to the way confiscation calculations are carried out under Part 2 of the Proceeds of Crime Act 2002 (POCA).
For more than twenty years, confiscation proceedings have required the Crown Court to determine a defendant's criminal benefit before deciding the amount to be paid under a confiscation order. While that fundamental framework remains unchanged, Part 3 of Schedule 21 introduces several important amendments affecting how criminal benefit is assessed, how certain assets are valued and when the full value of property should properly be treated as criminal benefit.
Despite the heading used in Schedule 21 and the accompanying Home Office guidance, many of these reforms do not alter the mechanics of payment or enforcement. Instead, they affect the earlier stage of confiscation proceedings by changing how criminal benefit is identified, valued and, in some cases, whether the full value of property should be treated as criminal benefit at all.
The reforms place hidden asset determinations on a statutory footing, introduce a new judicial discretion to reduce criminal benefit where applying the full statutory value would be unjust, modernise the valuation of property, including mortgage-funded assets and cryptoassets, and make a drafting amendment to the tainted gift provisions.
What has changed?
Part 3 of Schedule 21 introduces several reforms to the assessment and valuation of criminal benefit. While some, such as the amendment to the tainted gift provisions, largely clarify the existing law, others introduce significant new powers and discretions that are likely to have a substantial impact on future confiscation proceedings.
The legislation:
places hidden asset determinations onto a statutory footing;
amends the statutory provisions relating to tainted gifts;
gives courts a new discretion to reduce criminal benefit where applying the full statutory value would be unjust;
changes how property acquired partly with criminal funds is treated when calculating criminal benefit; and
introduces new valuation rules for property, cryptoassets and foreign currency.
These amendments are intended to produce confiscation orders that more accurately reflect a defendant's criminal benefit while giving courts greater flexibility to avoid unjust outcomes.
Hidden assets now have a statutory basis
One of the most significant changes is the introduction of new section 9A.
For many years, the courts have recognised that an unexplained disparity between a defendant's criminal benefit and their known assets may justify an inference of hidden assets. That approach has developed through case law but has not previously appeared expressly within POCA.
The Crime and Policing Act 2026 changes that position.
Where there is an unexplained difference between a defendant's criminal benefit and their known assets, the court may determine that the difference represents hidden property. However, before reaching that conclusion, the court must consider any alternative explanation advanced by the defendant.
This amendment places an established judicial approach onto a clear statutory footing while reinforcing the importance of properly testing the evidence before assuming the existence of hidden assets.
Amendments to the tainted gift provisions
Schedule 21 also amends section 77 of POCA, which governs when gifts made by a defendant are treated as tainted gifts for the purposes of confiscation proceedings.
The amendment replaces the previous wording of section 77(5) with a simplified provision that applies to gifts made after the commission of the offence concerned, or, where multiple offences are committed at different times, after the commission of the earliest offence.
In practical terms, however, the amendment appears to make little substantive difference to the existing law. The previous version of section 77 already treated gifts made after the relevant offence, or after the earliest of multiple offences, as tainted gifts.
Accordingly, this amendment appears to be one of drafting rather than substance. Although it modernises the statutory wording, it is unlikely to alter the practical operation of the tainted gift provisions in most confiscation cases.
A new discretion to reduce criminal benefit
Perhaps the most significant reform introduced by the Crime and Policing Act 2026 is the new discretion allowing the court to reduce the value treated as criminal benefit where applying the full statutory value would be unjust.
Historically, once property was found to represent criminal benefit, the court generally had little scope to depart from the statutory calculation.
The Crime and Policing Act 2026 changes that position.
The court may now reduce the value treated as criminal benefit, including reducing it to nil, where applying the full statutory value would be unjust.
The legislation is intended to address situations where attributing the full statutory value of property would produce an unjust outcome. The accompanying Home Office guidance gives two examples.
The first concerns a defendant who exercised only temporary or limited control over criminal property, such as someone persuaded to allow their bank account to receive criminal funds.
The second concerns a defendant whose conduct merely enabled them to retain property they already owned, rather than obtain new property.
In either situation, the court may conclude that attributing the full value of the property as criminal benefit would produce an unjust result.
This represents one of the most significant reforms to confiscation proceedings in many years and is likely to become an important area of litigation as the courts develop guidance on the circumstances in which this discretion should be exercised.
New valuation rules for property and cryptoassets
Schedule 21 also introduces several important valuation reforms.
Where property has been purchased partly with criminal proceeds and partly with legitimate borrowing, only the criminally funded proportion now forms part of the defendant's criminal benefit. The legislation also introduces specific provisions governing mortgage-funded purchases.
Further amendments introduce new rules for valuing:
property sold before confiscation proceedings;
destroyed cryptoassets, where market value immediately before destruction may be used; and
foreign currency, using the exchange rate applicable on the day of sale.
These amendments modernise POCA by providing clearer statutory rules for valuing increasingly complex forms of property encountered in modern confiscation proceedings, including mixed-funded assets, cryptoassets and foreign currency.
Why these reforms matter
These amendments should not be viewed in isolation.
They sit alongside the new principal objective introduced elsewhere by the Crime and Policing Act 2026, namely that confiscation powers under Part 2 of POCA are to be exercised to deprive the defendant of the defendant's benefit from criminal conduct, so far as within the defendant's means.
Viewed through the lens of that new principal objective, the reforms introduced by Part 3 of Schedule 21 demonstrate Parliament's intention that confiscation orders should more closely reflect the benefit actually obtained from criminal conduct while remaining proportionate.
For defence practitioners, this creates new opportunities to challenge benefit figures where a defendant exercised only limited control over the property or where applying the full statutory value would produce an unjust outcome.
For prosecutors, the amendments provide a clearer statutory framework for hidden assets, judicial discretion and asset valuation.
For forensic accountants, they reinforce the importance of detailed financial analysis. Questions of ownership, control, mixed funding, valuation and the tracing of criminal benefit are likely to become even more central to confiscation proceedings.
Final thoughts
Part 3 of Schedule 21 represents much more than a series of technical amendments to POCA.
Although some amendments, such as changes to the tainted gift provisions, are largely clarificatory, others fundamentally change how criminal benefit may be assessed.
In particular, the statutory recognition of hidden assets, the new judicial discretion to reduce criminal benefit where applying the full statutory value would be unjust, and the revised valuation provisions are likely to shape confiscation proceedings for many years to come.
Practitioners who continue to rely solely on the pre-2026 framework risk overlooking important new arguments that may materially affect the outcome of confiscation proceedings.
