You can say it's small beer that council tax is not being paid on more than half of the flats on One Hyde Park, the most expensive development in London and maybe the world. But it's not. That's because, as the Observer reports:
Only nine of the 62 apartments sold in One Hyde Park — the world's most expensive residential block — have been registered for council tax.
The ownership of the Knightsbridge apartments, which range in price from £3.6m for a one-bedroom flat to £136m for a penthouse, is now under investigation by Westminster city council, which is determined to pursue the monies owed by the secretive owners of the apartments. However, the myriad offshore companies protecting the identities of residents are, according to sources at the council, likely to defeat them.
An analysis of the records by the Observer shows that 25 of the flats' registered owners are companies in the British Virgin Islands. Other offshore tax havens used to purchase the properties include Guernsey, the Cayman Islands, Liechtenstein and Liberia.
Council officials are now expecting to canvass the apartments door-to-door, although sources said there were concerns that the building's security, including its SAS-trained doormen, could prove an obstacle.
The sums involved are, of course, small - partly because council tax is so stupidly capped so that properties such as these are wholly inappropriately taxed. That is not the issue for the moment though: the issue is that the culture of offshore is to be seen writ large here. There is secrecy. There is tacit aggression: the SAS trained doormen are mentioned as an obstacle to entry. And there is the contempt for law that tax havens and their clients show. Plus the complete veil of secrecy that tax havens - or secrecy jurisdictions as I prefer to call them - throw round their clients to help them evade their responsibilities.
Remember, secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
So what can be done? Here's a list:
1) Require that no property can be owned through an offshore company without the warm-blooded beneficial owner being named. If there is no such owner the property cannot be acquired.
2) No offshore company can own property in the UK without appointing a UK agent - and a named, warm-blooded person and not a company at that - being named as being liable to pay the obligations it owes in the UK. They must be proven to be UK resident.
3) In the event of breaches of obligation the penalty should be a charge 10 times the tax owing, levied on the property as a charge with the right to foreclose on the charge and have the property sold if not settled in two years.
That should stop that abuse.
We need to tackle tax havens, now.
This is a small step. But an important one because it shows the importance of shattering their secrecy.
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‘Ang on, squire, this is just one block, what about Marylebone, Mayfair, Paddington, Bayswater, Belgravia, South Kensington and Chelsea? Add on large chunks of Surrey, the Cotswolds and dare I say it Chipping Norton and a few other tasty locations and you are looking at a lot of Council Tax. Roll on a real progressive property tax.
What..no Isle of Man mentioned? Every other report on this matter includes the Isle of Man Tax Haven. Perhaps the Observer is being kind.
Yes; an unfortunate oversight to neglect to mention the Isle of Man.
The home of “dodgy dealing” in many things –
No doubt including providing assistance to the rich to dodge Council Tax.
THE ISLE OF MAN – HIGH ON THE LIST FOR DODGING!
if these people have a few homes they should qualify for the 50% reduction in council tax, how much would the council tax on the top band?
Perhaps its time to bring in the land tax.
How can I get on this gravy train, How much does it cost to hide ownership of my property ? if everyone starts to do this then the government will act very quickly.
This is a disgraceful state of affairs and what was Westminster Council thinking about in allowing this situation to develop? The introduction of a realistic property tax on such expensive real estate is long overdue. Why are the identities of these residents being concealed, I hope that no criminals are amongst them. I really feel cross about the possibility of apparently very wealthy foreign nationals, if and when they are staying in their expensive properties and enjoying the many benefits of London paid for by other London council taxpayers, not contributing to the funding of such benefits.
Westminster council ?
Now….don’t I remember them trying to rig elections sometime in the past…..
Didn’t someone say something about a 42 million surcharge in a “homes-for-votes” scandal ?
The answer is to tax the owners and not the occupiers of the land (most of the value) instead of the buildings. The ownership of all land should be registered (only 75% at the moment) so you know where to send the bill. If you are not prepared to claim ownership then you forfeit title and if you don’t pay the tax due you also lose title. Then it doesn’t matter who or where ownership resides. Nationalise the rent of land, which is our commonwealth, as Marx prescribed.
I am reminded of the conclusion to an article in yesterday’s Telegraph about the person who delivered last year’s Ralp Miliband lecture at the LSE (http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8915725/Saif-Gaddafi-a-monster-of-our-own-making.html). The truth is, One Hyde Park will be lived in entirely by people rich beyond comprehension, feted by our dumbed down society (why do I need to know that an ex-Aussie soap actress is dating the developer of this shrine to bad taste?), whose wealth is derived wholly legitimately through business practices most of us would regard as totally immoral.
You may blame offshore, the truth is much deeper than that. As the article concludes:
“For the most depressing thing about Saif’s squalid story is what it reveals about everyday corruption in a country that loves to moralise its way through the world, dispensing praise and censure to all and sundry.
In reality, Britain’s elites have become everyone’s pliable whore, whether Russian oligarchs or Middle Eastern autocrats. If Saif gets a trial, then we should all hope that a harsh light is shone on his elite British friends, for you can bet that not much will be revealed by the inquiries of the likes of Lord Woolf.”
Blame offshore all you want. The truth is, if you are a billionaire, whether Russian, Middle Eastern or Chinese, unless you do something utterly stupid like beat someone to death in front of witnesses, you are above the law in the UK.
That depends upon the witnesses does it not ?
If you beat a low-life newspaper vendor to death in front of cameras you do not have any problems….
Some people are above the law in the UK….no matter how many witnesses, no matter what quality of evidence.
Have u got a link for this story?
Isn’t there a tax lien in the UK? In the US, one can lose a multi million dollar property if the property tax of USD 1,000 remains unpaid for two – three years.
there seems to be a lot of envy amongst the readers of this blog.
Far from it
A belief in justice is not driven by envy, which is a hateful, negative emotion
It is driven by respect and compassion, which is a loving, positive emotion
If you see envy then that is your filter, but not what is actually happening
You need to remove the plank from your eye, I suggest
Don’t confuse “envy” with anger.
Anger caused by seeing a privileged few flouting the law courtesy of high-priced, clever -clog accountants, lawyers, bankers — often sitting off-shore in tax havens where the so-called “governments” can nor even spell the word “regulation”..
There is nothing to be envious about — but plenty to be angry about!
Richard Murray , will you show us how we can avoid council tax please, once the 99% start to use these schemes the government will act, is there some law saying everyone is equal and rules cannot favour one group over another?
A £99 council tax avoidance kit will sell like hotcakes,
Who is this Richard Murray?
Are you in the right place?
No…sorry….if HMRC does not allow the small people to use tax-avoidance because it deliberately seeks to use loopholes which is not “moral” then I think we can rely on the 1% being able to continue, while the 99% will toe-the-line.
Richard Murray I know a simple way of eliminating capital gains on share trading. it is undetectable by any person and it is not illegal.
Who is this Richard Murray?
A far better suggestion is to ban foreign registered corporate ownership of UK property, any corporate owned property has to be through a UK registered company. Then there has either be rent earned on the property or rent is imputed on the property and taxed in the company. If the company only owns that property and nothing else, then any sales of the shares in the company is treated as a property transfer and attracts stamp duty.
That will stop stamp duty avoidance and force foreigner to eithe rown in the own name or face tax on imputed rent.
I agree with you
Twice in a day!
It nevers ceases to amaze me that obvious tax evasion/avoidance schemes such as buying property through companies to avoid stamp duty or contractors workign for a single employer through a limited company have not been stamped down on in the UK, when many other countries seem capable of changing law to stop these schemes. Granted some attempt has been made on the contractor side, but I have yet to meet an IT contractor who doesn’t have some vehicle to minimise their tax.