Taxman denied more than £1bn as rich and famous register their townhouses, mansions and castles abroad

Published 18th Mar 2012

* 100,000 exclusive properties have been registered
into offshore companies
* 122 locations worldwide used to shelter properties
from Britain's taxman
* Mick Jagger, Ringo Starr and Bob Geldof among wealthy
using loophole

The country is missing out on more than £1bn in tax as the rich and famous have registered thousands of their exclusive properties into offshore companies, it has been revealed.

Town houses, mansions, vast country estates and castles are among the 94,760 properties which have been placed offshore, according to the Land Registry.

The tax dodge involves transferring ownership of a property to an off-shore company so when it comes to be sold the buyer purchases the company as a whole assuming de-facto ownership of the property.

Because the deal is classed as a corporate transaction as opposed to a property sale there are no stamp duty obligations involved.

This means that while a family buying a home costing £400,000 would pay £12,000 to the Government, a multi-millionaire buying a luxury pad could pay nothing.

The savings involved can be vast. Someone who purchases a £50million property though an off-shore company would avoid paying the treasury £2.5million.

Most of the transactions involve central London properties which are currently seen by the super-rich as a safe haven.

In exclusive Cornwall Terrace in North London, where the average asking price is £35 million, every single home has been transferred to a company on the Isle of Man.

A Sunday Times investigation found that rich homeowners have registered properties worth £200billion in 122 different locations around the world to avoid the taxman in Britain in the past 12 years.

The most popular is the Isle of Man, with 23,147 properties registered since January 1999. Other popular places include the U.S., Uganda and Libya as well as The Republic of Ireland, Netherlands and Germany.

In exclusive Cornwall Terrace in North London, where the average asking price is £35 million, every single home has been transferred to a company on the Isle of Man.

Rock stars Mick Jagger and Bob Geldof and Ringo Starr are among the many who have taken advantage of the loophole.

His spokesman told the newspaper he gained no tax benefits from this and registered the company abroad for security reasons.

Meanwhile, the newspaper said former Beatles drummer Ringo Starr's Surrey estate was transferred into a company in Jersey three years ago and the late George Harrison's Oxfordshire home was transferred to a company on the same island in 2005.

BVI companies own poverty campaigner Geldof's homes in London and Kent which his spokesman said was 'perfectly legitimate' tax planning and not a way to avoid stamp duty.

Britain's richest man Lakshmi Mittal, who owns a £57m home in Kensington, west London, transferred the ownership of the property to a British company eight years ago but a spokesman for the tycoon said stamp duty had been paid.

He is among many overseas tycoons who have taken advantage of the loophole, alongside the wealthy Hinduja family, worth £6bn, and Rasha Said, the daughter of billionaire Wafic Said.

Repeated crackdowns on stamp duty dodgers have been announced by the Government, but the wealthy are still regularly avoiding paying it.

Stamp duty on homes above £1m was raised to five per cent in April, meaning a buyer would pay a minimum of £50,000 in tax.

In November, it was revealed that even middle class homebuyers are exploiting the loophole to avoid paying stamp duty.

A clutch of financial services companies have sprung up in recent months promising savings of thousands of pounds in house-moving costs through Stamp Duty Land Tax (SDLT) mitigation schemes.

The companies, which often use cold-calling techniques and pop-up adverts on websites, claim the taxman has never mounted a successful challenge against them and insist they are both legal and transparent.

Source: ' ThisIsMoney '

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