Revealed: St Austell property owners registered in offshore tax havens

Tens of millions of pounds worth of property in St Austell is owned by companies based in offshore tax havens.

They include large parts of Fore Street in the town centre; the beaches at Carlyon Bay, and dozens of individual buildings throughout St Austell and the clay country.

NHS Kernow’s Sedgemoor Centre on Priory Road is also under offshore ownership, despite being listed as a Cornwall Council asset.

The buyers are registered in well-known UK tax havens such as Jersey, Guernsey, the Isle of Man, Luxembourg, British Virgin Islands, and the Cayman Islands.

Several are registered in Belize, a British overseas territory described by the US State Department this year as one of the world’s major money-laundering hotspots where it said “financial institutions engage in currency transactions involving proceeds from international narcotics trafficking”.

Registering offshore allows companies and individuals to benefit from a host of tax loopholes, including paying no capital gains tax, no inheritance tax and no stamp duty. It also allows buyers to remain anonymous.

The practice is not uncommon or illegal but means the government – and Cornwall Council – is missing out on vital tax revenue.

In the town centre the question of offshore ownership is having a more immediate impact.

Mayor Brian Palmer revealed that efforts by the town council to encourage companies to clean up their shops had met with frustration.

“This is one of the problems we’ve had all along when we’ve tried to get shop fronts tidied up,” he said.

“The idea was to put pressure on shop owners to smarten up, but what we found was a heck of a lot of buildings – all the national names in particular – were owned by layer upon layer of hedge funds and investment companies from all over the place.

“Because of that, trying to get anyone to say ‘yes, this is our building’ and take responsibility for it was almost impossible. It has been incredibly frustrating.”

Despite being occupied by NHS Kernow and appearing as an asset on Cornwall Council’s property register, the Sedgemoor Centre is actually owned by a South African pension fund, Plettenberg Ltd, which is registered in the Isle of Man.

Secrecy laws mean the identity of its owners and directors remain a mystery.

According to Land Registry documents, the building was bought by Plettenberg from Broadacre Property Company Ltd in October 2005 for £6.6m.

NHS Kernow is now the sole occupier of the building after Cornwall Council exercised a break clause in its contract with Plettenberg this week.

An NHS Property Services spokesperson said: “NHS Property Services inherited lease arrangements for the Sedgemoor Centre that were agreed with Cornwall Council and the landlord by a predecessor organisation, Cornwall and Isles of Scilly Primary Care Trust.

“NHS Kernow CCG, which is the building’s main occupier, is clear that it wants to continue operating from the Sedgemoor Centre for the foreseeable future.

“NHS Property Services has not taken on the lease for the section of the building formerly occupied by Cornwall Council and is currently in the final stages of agreeing a new lease for the NHS-occupied part of the building”.

Elsewhere in St Austell a total of seven units on Fore Street are owned by a branch of multi-billion dollar US hedge fund, Silver Point Capital (SPC).

The Connecticut-based firm, which specialises in investing in “distressed companies”, was set up by two former Goldman Sachs employees in 2002. It is registered in the British Virgin Islands.

SPC is one of four hedge funds to jointly own a 31 percent stake in the Co-Op bank, which they helped bail out to the tune of £1.5 billion in 2013.

The company acquired the Fore Street units in February last year for an undisclosed fee.

Luxembourg-registered Lunar Holdings – a partnership between Old Vicarage Place owners M&M Management and Apollo Global Management – also owns units on Fore Street, which it acquired in 2014 for £2.1m.

And Land Registry records reveal that in 2013 Guernsey-based GMV Nine paid just £3m for the beaches at Carlyon Bay, which are currently under development by Commercial Estates Group (CEG) as part of a £250 million scheme to build a seaside resort.

The government has in recent years faced fierce criticism for not doing more to clamp down on companies which exploit UK tax havens.

Since 1999, 94,670 offshore entities have been set up purely to hold UK property.

St Austell and Newquay MP Steve Double said: defended the government’s record.

“I believe that foreign companies investing in the Cornish economy must pay their fair share of tax.” he said.

“Recently the Chancellor announced that foreign companies buying land and property now have to pay 15 percent stamp duty on all purchases.

“Clearly I prefer money must be kept locally as much as possible.

“However we must not deter investors and we should bear in mind many British companies have foreign assets abroad.”