stock market is rising and the market for
penthouses is booming, it all looks well.
Actually, its a sign of full-on decline.
The rich, who offshore their profits, can
then turn around and secretly buy houses
in London, without declaring who they
are. It doesn't even matter who they are
as there's no property tax in the UK.
That's the size of the scam going on.
That's why there's no Mansion Tax.
It's bad for (the image of British) business.
checkitout: The
Guardian
How
secret offshore firms feed London's property boom
Investigation
names investors exploiting offshore tax and duty loopholes allowing overseas
purchasers to buy up UK property
David
Leigh, Harold Frayman and James Ball
, Monday 26 November 2012 20.58 GMT
The
UK is increasingly turning into a property speculators' haven, thanks to tax
loopholes and the offshore secrecy offered by the British Virgin Islands (BVI) that hides many property transactions.
We disclose the identities of some of the people secretly buying up Britain.
The
Guardian's investigation with the Washington-based International Consortium of
Investigative Journalists (ICIJ), covering nearly 60 sample premises, shows how
anonymous buyers are taking over more and more blocks of luxury housing.
Some
purchasers live abroad; other buyers live in the UK itself while they build up
property empires using these artificial structures.
In
2011 alone, more than £7bn of offshore money flooded into potentially
tax-exempt purchases of UK houses, flats and office blocks. Most buyers snapped
up property in central London. These offshore buyers are a driving force of the
capital's spiralling property prices versus the rest of the UK: since March
2009, property prices in prime central London have increased by 49% – five
times more than the rest of the UK, according to estate agents Knight Frank.
In
our findings, the majority of the offshore transactions used entities
registered in the BVI, which accounted for £3.8bn of the total: a continuing
steep rise from £2.7bn in 2010 and £1.5bn in 2009, according to Land Registry
data. Smaller amounts came from similar entities registered in Jersey and the
Isle of Man.
... The
then Blair government rejected his recommendations.
Three
major tax loopholes are currently fuelling the secretive offshore property
boom:
• No
capital gains tax. Offshore entities, provided they are genuinely controlled
and managed outside the UK, do not pay any tax on the proceeds of property
speculation, unlike resident Britons.
• No
inheritance tax. People living abroad, and "non-doms" who say they
are only living in Britain temporarily, can legally avoid inheritance tax by
buying a house in the name of an offshore entity. It is then considered to be a
tax-free holding in a foreign company, not a British asset.
• No
stamp duty. Anyone, British or foreign, can legally avoid up to 5% stamp duty
being imposed on the next purchaser by holding their house in an offshore
company. Upon sale, the company shares are transferred, not the house. The
company has to be managed offshore, which also saves 0.5% duty on UK share
transfers. These artificial techniques were partly outlawed by George Osborne
in this year's budget, but only for the small minority of UK houses worth more
than £2m.
