Figures show rich homeowners avoiding billions in stamp duty

Unpublished estimates show 5,000 homes may be registered in ways to avoid property taxes

The Treasury faced demands last night to examine the extent of tax avoidance by the country's wealthiest homeowners who have transferred £25bn worth of property into corporate hands.

Unpublished government estimates show that about 5,000 British homes are believed to be registered in a way that would allow their owners to avoid a slew of property taxes.

The statistics were obtained by the investigative website Exaro.

The high-value properties are overwhelmingly in central London and about 500 of the homes, worth a total of £1.6bn, were transferred last year.

In his Budget the Chancellor, George Osborne, promised to come down "like a ton of bricks" on the practice of switching large properties into corporate control and immediately introduced a stamp duty levy of 15 per cent for houses bought through a company.

The Treasury plans to introduce a new annual charge next April for £2m-plus properties held through companies . It is also proposing to extend capital gains tax to profits made by offshore companies on the sale of those properties, from which they are currently exempt.

However, tax experts say the real challenge is closing an inheritance tax loophole which enables foreign companies to avoid the 40 per cent tax payable when a property owner dies.

In the case of Rinat Akhmetov, the Ukrainian billionaire who bought the penthouse at One Hyde Park through an offshore company, the Treasury stands to lose almost £55m unless the loophole is closed before he dies.

Last night the Treasury said it could not comment on Exaro's conclusions, but that the Government was taking tough action to stamp out tax avoidance on property.

Cathy Jamieson, the shadow Treasury minister, said families on low and middle incomes would be shocked by the extent of this tax avoidance.

She said: "The Treasury must investigate just how much the British taxpayer is losing from these arrangements. We have called on the Government to clamp down on this type of tax avoidance. With George Osborne's claim that 'we are all in this together' already in tatters thanks to his tax cut for millionaires, it's time he got a move on and acted on this issue."

On Cornwall Terrace, an upmarket conversion of eight imposing period houses overlooking Regent's Park in London, the average asking price is £35m, making it the world's most expensive row of Georgian mansions. Every home sold has reportedly gone to an offshore company, meaning the buyers would have to pay only £52,500 to buy shares in the company, instead of £2.45m in stamp duty at 7 per cent.

The developer, Oakmayne Bespoke, said it had paid stamp duty land tax "in full on its acquisition of the properties" before carrying out its luxurious redevelopment, but declined to comment on subsequent sales.

John Whiting, the tax policy director at the Chartered Institute of Taxation, said: "These figures confirm that a substantial body of expensive property is held in a way that helps their owners avoid taxes that you and I pay. I'm quite sure the average UK taxpayer will question why these exemptions exist."

Richard Murphy, a director of Tax Research LLP, said that in spite of claims that "aggressive tax avoidance was morally repugnant", the Budget measures were no more than "tokenism".

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: DBA Developer - SQL Server

    £30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Customer Service Administrator

    £13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

    Recruitment Genius: Dialler Administrator

    £22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

    Ashdown Group: Contracts Manager - City of London

    £35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

    Day In a Page

    Blairites be warned, this could be the moment Labour turns into Syriza

    Andrew Grice: Inside Westminster

    Blairites be warned, this could be the moment Labour turns into Syriza
    HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

    The mystery of Britain's worst naval disaster is finally solved - 271 years later

    Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
    Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

    'I saw people so injured you couldn't tell if they were dead or alive'

    Nagasaki survivors on why Japan must not abandon its post-war pacifism
    Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

    The voter Obama tried hardest to keep onside

    Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
    RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head

    RuPaul interview

    The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
    Secrets of comedy couples: What's it like when both you and your partner are stand-ups?

    Secrets of comedy couples

    What's it like when both you and your partner are stand-ups?
    Satya Nadella: As Windows 10 is launched can he return Microsoft to its former glory?

    Satya Nadella: The man to clean up for Windows?

    While Microsoft's founders spend their billions, the once-invincible tech company's new boss is trying to save it
    The best swimwear for men: From trunks to shorts, make a splash this summer

    The best swimwear for men

    From trunks to shorts, make a splash this summer
    Mark Hix recipes: Our chef tries his hand at a spot of summer foraging

    Mark Hix goes summer foraging

     A dinner party doesn't have to mean a trip to the supermarket
    Ashes 2015: With an audacious flourish, home hero Ian Bell ends all debate

    With an audacious flourish, the home hero ends all debate

    Ian Bell advances to Trent Bridge next week almost as undroppable as Alastair Cook and Joe Root, a cornerstone of England's new thinking, says Kevin Garside
    Aaron Ramsey interview: Wales midfielder determined to be centre of attention for Arsenal this season

    Aaron Ramsey interview

    Wales midfielder determined to be centre of attention for Arsenal this season
    Community Shield: Arsene Wenger needs to strike first blow in rivalry with Jose Mourinho

    Community Shield gives Wenger chance to strike first blow in rivalry with Mourinho

    As long as the Arsenal manager's run of games without a win over his Chelsea counterpart continues it will continue to dominate the narrative around the two men
    The unlikely rise of AFC Bournemouth - and what it says about English life

    Unlikely rise of AFC Bournemouth

    Bournemouth’s elevation to football’s top tier is one of the most improbable of recent times. But it’s illustrative of deeper and wider changes in English life
    A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

    A Very British Coup, part two

    New novel in pipeline as Jeremy Corbyn's rise inspires sequel
    Philae lander data show comets could have brought 'building blocks of life' to Earth

    Philae lander data show comets could have brought 'building blocks of life' to Earth

    Icy dust layer holds organic compounds similar to those found in living organisms