As the Mail reported this weekend:
Even though the developers behind swanky One Hyde Park revealed to The Mail on Sunday last year that they had abandoned stamp-duty saving schemes for their super-rich buyers, taxpayers could still lose out when these almost exclusively foreign multi-millionaires come to sell up.
So far, of the 38 flat leases at One Hyde Park logged with the Land Registry, 35 have been sold to companies, 16 of them in the British Virgin Islands, and in other tax havens such as Guernsey, Liechtenstein, the Isle of Man, Liberia, Belize, St Vincent and the Grenadines, the Bahamas and the Cayman Islands.
This means that the sales can go through simply by transferring the ownership of the shares of these holding companies, rather than registering the names of new owners on the Land Registry. The result is a five per cent saving in stamp duty on properties worth more than £1million.
Three things follow on.
First stamp duty abuse.
Second potential capital gain tax abuse by non-domiciled people.
Third, a reasonable basis for enquiry as to the source of funds.
But because the government has sacked so many H M Revenue & Customs staff their probably aren't enough staff to pursue the issue.
Which is, no doubt, deliberate.
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The Council Tax for these properties is £2,158.24 pa. The current and probably all future owners will not be paying any other taxes here. Since most of the value of the properties is in the land/location value the potential yield from a land value tax would be more than £1m pa per property.
Surely you mean the PREVIOUS government sacked so many staff.
Now, under this scenario, do you still believe this was intended (by Labour) to stop the pursuit of stamp duty evasion/avoidance?
I have been explicit in condemning New Labour on this issue
But the Tories are making it worse
You ignore the truth
The stamp duty loophole may not be pretty, but it is not abuse. These tax arrangements fully comply with the laws of the UK legislature. They are widely known and used. The UK parliament could very easily restrict of forbid them, but it has consistently chosen not to intervene.
The issue around capital gains tax is pure speculation. Anyway, how could there be any sort of abuse of capital tax rules here, since UK property is by definition exempt of capital tax?
D
If you don’t know that UK property is subject to CGT unless a main residence then it’s clear you haven’t the faintest idea what you’re talking about
For an offshore owner of properties in the UK there is no UK CGT payable, this is a nice example of the UK offering non citizens a better deal than its own citizens, however in many cases illicit offshore companies are used so that UK citizens can evade potential CGT and thus the UK undermines itself ..
The the former British United Shoe Machinery factory site in Leicester is owned by Trafalgar Global Ltd with a contact address in Nicosia, Cyprus. It is currently being re developed for housing . Unfortunately £15m of public money is being spent to build “affordable” housing whilst the site owners line their pockets with tax free public cash. No one involved in the redevolpment seems interested in asking any questions about Trafalgar Globals tax arrangements or who ultimately owns it. Could it be the same people who left the BUSM pensioners with no money in the pot but were awarded with knighthoods?
http://www.leicester.gov.uk/your-council-services/ep/regeneration/regenerationnews/busm-housing/
Another site in Leicester is the former Donisthorpe Mills, a listed building which is owned by a company registered in the Caymen Islands. The owners have allowed the building to be heavily vandalised, no doubt with the aim of presenting the council with a fait accomplie of the building being beyond economic repair so that they can apply for consent to demolish and increase the value of the development site. I spoke to a council officer who told me that the owners were impossible to contact and that the council could not afford to do any emergency repairs on the building because there was little prospect of recovering the money spent.
Just out of interest Richard, quite a lot of property in Leicester is owned by various small local private company retirement benefit schemes . Some of the are styled as the directors of company x scheme, others as just the company scheme. As most of these firms are small and use out workers, casual workers, students on working visas etc, I suspect that the schemes are not for the benefit of the “employees” but another tax dodge.
Your opinion would be appreciated.