A recent analysis conducted by the BBC has revealed that overseas companies and entities tht are registered in the British Virgin Islands are the owners of almost one-fourth of all of the properties in England and Wales.
Among them about 23,000 properties are owned by companies that have their base in the Caribbean archipelago alone which is higher than any other country of registration. The owner of these companies number 11,700 and all are registered in the overseas territories of the U.K.
Land Registry data on overseas property ownership was the basis of the investigation.
As of January 2018, overseas firms were the owners of about 97,000 properties in England and Wales, the research found.
The findings add to the body of allegations that a large number of companies make use of the British-controlled tax havens to get registered and avoid paying taxes.
Jersey, Guernsey and the Isle of Man closely follow the British Virgin Islands (BVI) in terms of number of registered companies.
British Virgin Islands, Jersey, Guernsey and the Isle of Man are the regions where registration has been done for about two thirds of all of the overseas firms that are owners of properties in England and Wales.
Additionally, Hong Kong, Panama and Ireland are the official headquarters of many of the foreign companies that own properties in the U.K.
The investigations found that London properties account for nearly half or 44 per cent of all of the properties that are owned by overseas companies in England and Wales. O the other hand, the City of Westminster is the place where over one in ten or 11,500 properties are under the ownership of foreign companies within England and Wales.
The British Virgin Islands should not be labeled as a tax haven, the government of the country said. there could be multiple reasons – many of which would be practical, behind many of the foreign property owners in the U.K. have their registered companies based in the BVI, it said. the argument put forward is that many of the large property deals often have multiple investors placed in multiple countries and the companies registered in the BVI help to get together such investors under one common roof.
Relevant authorities are supplied with all of the necessary details such as ownership of the companies registered there, the BVI also said.
The erstwhile headquarters of the Metropolitan Police, New Scotland Yard, at 8-10 Broadway is the costliest of the properties in the UK that are owned by foreign entities registered in the tax havens. The owner is Abu Dhabi Financial Group which bought the property for £370 million in 2014. However, officially, BL Development, a Jersey based company owns the property.
There are also many residential properties – in addition to commercial ones, that are owned by foreign entities registered in the tax havens.
The incentive for companies owning both commercial and residential properties in the UK is also related dot avoidance of taxes.
“Until April 2017, if you weren’t resident in the UK and held a residential property via a company it was not counted as being an asset for UK-based inheritance tax purposes. So having a property through an offshore company meant you escaped inheritance tax,” says Mark Giddens, of accountants and consultants UHY Hacker Young.
This policy was however brought to an end since last year which has resulted in a dramatic reduction in new foreign ownership of residential properties.
(Adapted from BBC.com)