More than 200 wealthy foreigners are choosing to pay £218,200 a year in tax rather than declare the fact of their ownership of their luxury UK properties worth more than £20m, London’s Observer newspaper is reporting today.
The report, which is based on HM Revenue & Customs data, shows that “owners of mega-mansions are choosing to pay the annual tax rather than register their London properties under their real names”.
The Observer, which is the sister publication of The Guardian and is published on Sundays, notes that owning a property via an offshore company in this way is not considered illegal as long as the correct tax is paid.
The UK Government introduced this tax – known as the Annual Tax on Enveloped Dwellings, or ATED, covering residential properties owned via “non-natural persons”, such as offshore companies – in 2013, to crack down on “dirty money” used to secretly buy up high-end residential property. Often, the property isn’t lived in, as the reason for its ownership is strictly financial.
The Observer report quotes Jamie Morrison, an accountant who advises the super-wealthy for the accountancy firm HW Fisher, as saying that for many of his clients, “privacy is more important than paying the tax”.
“If you’ve got a property worth £20m, it is not much in the grand scheme of things,” Morrison told the publication.
According to HMRC, there are 210 UK properties worth more than £20m which are currently owned by an offshore company or other “non-natural person” vehicle, The Observer report notes.
It also notes that 20 apartments in One Hyde Park – a “super-luxury Knightsbridge complex” developed by Christian Candy – have been sold for more than £20m each and are owned by offshore companies, according to an analysis of Land Registry records.
To read The Observer report on the Guardian’s website, click here.