Home is where the tax haven is…
ONE in every six homes sold in Westminster and Kensington & Chelsea over the last three years for which data is available was bought by a company in an offshore tax haven, the Eye has established.
The market for homes is now so skewed by sales to overseas companies that a quarter of all cash spent on residential property in just these two London boroughs came via companies from Belize to Anguilla, Jersey to the South Pacific Cook Islands.
The figures, based on data acquired by the Eye for property transactions in 2012, 2013 and 2014 and analysed alongside market statistics by data-savvy London estate agency YOUhome, reveal the extent to which the top end of the British property market is dominated by secret buyers hiding behind offshore companies.
Downward trend
In Britain’s two most expensive boroughs 3,520 homes were bought using offshore companies, out of a total of 21,373 sales, or 16.5 percent. The value of those using offshore companies was £8.25bn, or 23.8 percent of the total value and giving an average price of £2.34m. The most popular location for the shell company used was the British Virgin Islands, followed by Jersey, Guernsey and Panama.
The figures do mask a downward trend, almost certainly linked to higher stamp duty for corporate-owned residential property plus an annual “enveloped dwellings” tax announced by chancellor George Osborne in his 2012 budget. The proportion of properties bought using an offshore company fell from 20.3 percent in 2012 to 12.4 percent in 2014 – still a large number given that there is no need for such structures other than tax avoidance or secrecy.
Offshore business as usual
In the most up-market locations, however, the taxes appear to have had no effect. In Knightsbridge, the proportion of sales through offshore companies increased to 49 percent (worth 59 percent of the value) in 2014. Similar proportions of sales, 45 percent and 48 percent, were found in 2014 in Belgravia and the Queen’s Gate area that runs from Hyde Park to South Kensington.
Osborne’s “clampdown” on tax haven companies buying up London might have worked on some of the lower-level tax dodges, but for those with serious and often pretty dubious money, it’s offshore business as usual.
