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Unpublished estimates show 5,000 homes may be registered in ways to avoid property taxes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Unpublished government estimates show that about 5,000 British homes are believed to be registered in a way that would allow their owners to avoid a slew of property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".
educationTo mark International Women's Day, Sarah Brown on how charities have brought proper joined-up thinking to the delivery of education
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Sir Patrick Stewart patches into David Cameron and Barack Obama's Ukraine talks with packet of wet wipes
- 4 Study suggests that 'gaydars' are real - at least for women
- 5 Man stabbed with Legend of Zelda Master Sword in serious condition
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...
£30000 - £40000 per annum + benefits: Pro-Recruitment Group: Personal Tax, FTS...
Day In a Page
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew