|OVER the last year Private Eye has revealed the extent of ownership of British land by offshore companies, generally for tax avoidance and often to conceal dubious wealth. Now the Eye has created an easily searchable online map of these properties, revealing for the first time the British property interests of companies based in tax havens from Panama to Luxembourg, and from Liechtenstein to the South Pacific island of Niue. Using Land Registry data released under Freedom of Information laws, and then linking more than 100,000 land title register entries to specific addresses, the Eye has tracked all leasehold and freehold interests acquired by offshore companies between 2005 and 2014.
|The map shows all land and property registered in England and Wales in the name of an offshore company between 2005 and July 2014. It uses data released following Freedom of Information requests from Private Eye and expert work by software engineer Anna Powell-Smith.
Freehold properties are indicated by orange shapes covering the exact area of the property. Leasehold properties are shown by purple pin points. The map includes properties owned by any overseas company, not just those based in tax havens, sometimes for legitimate reasons. Even the freehold on the saintly Eye’s premises, owned by an Australian company, appears.
Highlighting an individual property’s details also provides a link to email the Eye with any further information readers may have about the property.
All data is from Land Registry records, which occasionally contain errors. “Price paid” figures may be totals for sales including other properties. When a property title has been identified, the underlying Land Registry record can be obtained for a £3 fee from www.gov.uk/search-property-information-land-registry.
Using this data the Eye published a series of exposés of the companies, arms dealers, oligarchs, money launderers and others who use offshore companies, before David Cameron addressed the issue on a trip to the Far East in July. “There is no place in Britain for dirty money,” he said, promising to publish details of the property titles held by offshore companies. Even if this were to happen, however, it would fall far short of enabling offshore-owned property to be immediately identifiable, as the Eye can now make possible.
So what kind of operator might be found in this mine of information? The Eye’s quarrying so far has unearthed an eclectic cast of characters.
Property investment and development companies routinely use offshore corporate vehicles to own major buildings to achieve capital gains tax and stamp duty advantages. When, for example, 1 Cabot Square, the original Canary Wharf tower, was bought by the Qatar Investment Authority in 2012 as part of a financing deal, it was acquired by Luxembourg company OCS Investment sarl. Scores of leaseholds on other parts of the docklands financial district are also held offshore.
Those taking advantage of the super-prime London property boom to develop luxury apartments also keep their companies clear of the UK tax net. When in 2006 Christian Candy’s CPC group acquired Bowater House in Knightsbridge for £480m in a joint venture with the Qatari prime minister, to create the plutocrats-only One Hyde Park apartments, they did so through Guernsey-based Project Grande (Guernsey) Ltd. The Candy brothers’ UK company simply “managed” the development, the real profits on the development heading to the Channel Islands (with the help of one of the Candys’ UK companies’ directors at the time, current HM Revenue & Customs board chairman Ian Barlow). Leaseholds sold on the apartments themselves are also owned through offshore companies.
Other typical players of the offshore commercial property game include chains of shops such as Boots, Shell forecourts and pubs such as the Slug and Lettuce, not to mention countless “retail parks”. While chancellor George Osborne has ended some tax advantages available to individuals who own property offshore, in six years in charge of the tax system he has shown no appetite to curb corporate tricks.
Born (tax) free
Owning British property offshore is as old as the (largely postwar) growth of financial services in Britain’s network of overseas territories and Crown dependencies. It has been a favoured way, along with clever trust structures, for generations of families to pass on wealth without paying estate duties (now inheritance tax).
Perhaps the most prominent such family are the Harmsworths, whose male heirs became Lords Rothermere a century ago and now run the newspaper dynasty behind the Daily Mail. The empire is controlled by the family through a Bermudan company itself owned by a series of trusts. The 3rd Lord Rothermere, Vere Harmsworth, became a tax exile in the 1970s, bequeathing the opportunity to claim “domicile” status in France to his son and current Lord Rothermere, Jonathan.
The setup allows not just the multi-billion-pound business interests led by the patriotic Mail to be passed on inheritance tax-free, but also substantial property interests when held offshore. So tracts of farmland in Dorset are now owned by Harmsworth Trust Company (PTC) Ltd in the British Virgin Islands, while even a space in an underground Kensington car park near the Mail offices is owned by Harmsworth Holdings Ltd in St Lucia.
Eye 1394 revealed that in total 490,000 acres of England and Wales larger than the area of Surrey or Greater London are owned by offshore companies, most of it almost certainly acquired in this way for stamp duty and inheritance tax reasons. The figure for Scotland is 750,000 acres, including estates owned by the Duke of Roxburgh using a Bermudan company and none other than phoney pharaoh Mohammed Fayed through a Liechtenstein company.
The most quintessentially English land owned offshore is the Hambleden estate on the banks of the Thames near Henley. Home to the chocolate box brick-and-flint village that has doubled as a film set for Midsomer Murders and Chitty Chitty Bang Bang, the area is owned by BVI company Hambleden Estates Inc, which turns out to be controlled by Swiss foreign exchange dealer Urs Schwarzenbach.
Schwarzenbach’s neighbour a couple of miles up-river can lay claim to the most expensive single land purchase on record through an offshore company. In 2011 the former president of the Bank of Moscow, Andrey Borodin, acquired the 300 riverside acres that is Park Place for £120m through yet another BVI company, Durio Ltd. Borodin currently enjoys political asylum in the UK while the Russians pursue him over fraud allegations.
Borodin is one of scores of wealthy Russians who have bought English property through offshore companies. When the Eye looked at one of Britain’s richest streets, Kensington Palace Gardens, it emerged that one home had been acquired (reportedly for a nine-figure sum) by the oil-to-media businessman who topped the most recent Sunday Times Rich List, Leonard Blavatnik.
He used a Delaware company, while neighbour, fellow oligarch and Chelsea FC owner Roman Abramovich bought his pile through a Cyprus company. Since 2005 six other properties on the same road have been bought by BVI companies, two by companies registered in St Vincent and Grenadines and one in the Bahamas.
It is not known who is behind these latter purchases, nor where their money came from, but whoever they were they found an almost indecently willing seller at the heart of the British establishment. The freeholds on Kensington Palace Gardens are owned by The Crown Estate, which means they are legally property of the Queen but with all profits going to the Treasury, less 25 percent of operating profit which since 2012 has replaced Brenda’s civil list payments.
Such a body which also owns prime London property from Westminster to Hyde Park and swathes of coastal Britain might be expected to show some reluctance to sell offshore (even to the Queen’s own tax havens). But the Eye discovered that in the two years up to March 2014, it sold £135m worth to offshore companies.
In total the Eye found 120 former Crown Estate properties that, directly or indirectly, have ended up owned by companies in tax havens including Panama and the Seychelles. The real owners of most remain entirely anonymous.
Riches from yesteryear’s questionable businesses are evident in the capital, meanwhile. Instrumental in the latest bribery scandal exposed by the Eye, involving a decades-old telecommunications contract with the Saudi Arabian National Guard, was Lebanese fixer Mahmoud Fustok through a firm run with his brother Mansour. Information contained in the “Swissleaks” data of HSBC Geneva accounts obtained by the International Consortium of Investigative Journalists gave Mansour’s London address as a house in St John’s Wood owned by a Panamanian company, Restonal Naviera SA.
Other Saudi arms veterans to have luxuriated in London’s smarter addresses courtesy of the offshore corporate network include Riyadh’s defence minister at the time of the infamous Al Yamamah deal, Sultan bin Abdulaziz, who died in 2011 but until then was said to ultimately own a row of mansion blocks in Knightsbridge recently put on the market for £300m by companies registered in the Caribbean haven of Curaçao. The big Saudi name in that deal, chief negotiator Prince Bandar, owns 2,000-acre Glympton Park in Oxfordshire through a Jersey company, while another facilitator on the deal, Wafic Said, owns nearby Tusmore Park through another Panamanian company.
Decades of Middle Eastern turmoil have been kind to London’s estate agents. Saddam Hussein’s main arms broker, Ramzi Dalloul, has a home in exclusive Phillimore Gardens, Kensington, owned through Liberian company Edenroc Ltd, while his Lebanese compatriot Faoud Makhzoumi owns a home in nearby Cheniston Gardens through a Panamanian company, Aminvest Corporation.
Makhzoumi came to Britain’s attention as a friend of disgraced 1980s Tory defence minister Jonathan Aitken, who failed to disclose his connections to the dealer. The Tory association is no thing of the past, either: Faoud’s wife May donated to the Tories as recently as 2013 and has given £1m in total since 2010. Aminvest is administered by Arbuthnot Latham, the private bank chaired by former Tory treasurer and major donor Sir Henry Angest.
Lifting the veil
If the benefits of offshore companies for holding UK property are ever to be fully withdrawn, some wealthy Tory donors will have to be upset in the process. One of the single largest donors, with £3m handed over so far, is Australian-born “non-dom” hedge fund manager Michael Hintze, whose Clapham Common home is owned by a Guernsey company, itself controlled by a series of trusts.
Figures analysed by the Eye show that the use of offshore companies is not slowing. In three years up to March 2015, in just the London boroughs of Westminster, Kensington & Chelsea and Camden (taking in Hyde Park), £8bn of property acquisitions were made in this way. But Land Registry data does not disclose the ultimate owner of the property. David Cameron’s plans come nowhere near to doing so either. The Eye’s online map, however, provides the starting point from which readers and others can begin to lift the veil of offshore secrecy that covers Britain.