Canary Wharf tax breaks `safe'
Monday 08 March 1999
The reassurance comes as it emerged that Paul Reichmann, the chairman, could receive an extra 4 per cent stake - worth pounds 100m - in the company if the East London development is completed and let on time.
Canary Wharf has been hit by suggestions that the Government is considering the withdrawal of a package of tax perks granted to lure new tenants.
The Government and Inland Revenue are believed to be looking at the tax breaks after a complaint by Michael Cassidy, a director of property group British Land and a former planning chief at the Corporation of London, the body responsible for the City, Canary Wharf's rival. Mr Cassidy is believed to have told ministers that Canary Wharf is telling investors the perks will last until 2005, even though Parliament was told they would end in 2002.
However, in the flotation prospectus due on Thursday, Canary Wharf is expected to say its tax position is protected by law. The company is understood to have sought legal advice and been reassured their tax position is safe.
According to the lawyers the concessions, used to entice tenants from the City, were offset by funds invested by Canary Wharf to regenerate Docklands. It is believed to have spent over a pounds 1bn to improve transport and infrastructure. The bulk of the Canary Wharf's investment was used to part-fund the Docklands Light Railway and Jubilee Line Extension. This compares with tax breaks of around pounds 1bn in the past 10 years and of over pounds 300m in the next few years.
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