An accountant learns the following facts about four different clients. In which situation does the client hold criminal property under the Proceeds of Crime Act 2002, so that the accountant must consider making a money laundering report?

Correct answer: B) A client deliberately fails to declare income to HM Revenue & Customs and keeps the tax saved

Explanation

Under the Act, criminal property includes any benefit from criminal conduct, including money saved through deliberate tax evasion. A client who deliberately fails to declare income and keeps the tax saved therefore holds criminal property, and an accountant in the regulated sector who knows or suspects this must consider reporting to the firm's money laundering reporting officer. An honest mistake that is promptly corrected, lawful tax planning and an investment loss do not involve criminal conduct.