George Osborne’s family reportedly ‘struck a £6m property deal’ with firm based in tax haven
George Osborne’s family business struck a £6m deal with a property developer based in an offshore tax haven, it has been reported.
The upmarket wallpaper firm Osborne & Little is claimed to have linked up with a corporation in the British Virgin Islands to turn its former headquarters in an expensive south London district into flats and houses.
Once they had received planning permission for the site, Osborne & Little sold the site to its foreigner partner for £6,088,000. The deal was signed by Sir Peter Osborne, the Chancellor’s father.
Details of the agreement, which emerged on the eve of the Budget, were disclosed in documents obtained by Channel 4. There is no suggestion that the Chancellor, or the family firm, avoided tax as a result of the deal.
However, David Quentin, an adviser to the Tax Justice Network, told Channel 4 that Osborne & Little must have been aware that the purchaser, Nightingale Mews Inc, was based in the Caribbean tax haven.
He said: “It’s quite clear that we’re dealing with an offshore company. If you look at this agreement you see that the buyer company is named and then it’s expressly described as incorporated in the British Virgin Islands.”
At the time of the deal in 2005, the future Chancellor was a beneficiary of a family trust which owned at least 15 per cent of Osborne & Little. The size of his personal stake is not known.
It focused on plans by the company to redevelop its headquarters in Temperley Road, Clapham. The partners submitted a joint planning application to Wandsworth Council for around 40,000 sq ft of housing in a gated mews street to be named Nightingale Mews. The council approved plans to build 16 houses and 26 flats in January 2005, and four months later Osborne & Little sold the site to Nightingale Mews Inc.
Channel 4 claimed an analysis of Land Registry records showed the properties were sold for around £20m and estimated that the developer could have made a profit of up to £8m on the sale.
It said Nightingale Mews Inc which was dissolved in 2010 after the sale of the homes, could have legally avoided some £2m in corporation tax by being based in a tax haven instead of Britain.
A Treasury spokesman declined to comment in detail but said: “This is a totally bogus and desperate story.”
Sir Peter, managing director of Osborne & Little, told Channel 4 his company “is not in the business of property development and simply sold the property on a commercial basis”.
He said all relevant tax on the sale were paid and added: “The company retained no benefit in any future development of the property and the directors have no knowledge of the success or otherwise of the redevelopment.”
Sir Peter said the company’s directors “cannot comment on the tax affairs of another company, whose tax residence, rather than country of incorporation, is not known to them”.
Mr Osborne has described “aggressive” tax avoidance as “morally repugnant”, while the Conservative manifesto said: “Tackling tax evasion and aggressive tax avoidance and tax planning is an important part of our long-term economic plan.” David Cameron has also led calls for greater transparency worldwide over the ownership of companies.
The British Virgin Islands are considered among the world’s largest tax havens. Although only 28,000 people live there, more than 800,000 companies are incorporated.
