Bureau Recommends: 18,700 properties owned by off-shore companies

Millions of pounds lost in tax avoidance on property sales

Figures released by the Land Registry reveal that more than £100 billion of property in central London alone is held in offshore companies and therefore avoids certain taxes.

The Sunday Times analysed an inventory of 18,700 title deeds, obtained through a Freedom of Information Act request, and found that millions of pounds could be lost through a loophole.

By holding property through offshore companies home owners can avoid weighty stamp duty land taxes.

For properties over £1m stamp duty is calculated at 5% of the property price. But stamp duty can be reduced to 0.5% if a property is transferred through the sale of company shares instead of through the usual transaction between individuals.

Placing property in offshore companies can also mean the avoidance of inheritance tax, charged at 40%.

Experts calculate that the tax dodge means around £330m-£500m a year is lost in stamp duty and £1.3 billion in inheritance tax.

More than one in 20 properties in Central London are owned offshore, while cities such as Manchester, Leeds, Derby and Coventry are also popular with property owners using tax havens.

The revelations put added pressure on the Treasury, which is expected to target those avoiding stamp duty in its spring Budget.

Exchequer Secretary David Gauke was quoted as saying ‘It simply isn’t right that during tough times- when we’re trying to bring down the deficit- hard-working people pay their taxes in full while others avoid contributing their fair share through a range of elaborate schemes.’

The Sunday Times quotes Lord Oakeshott: ‘For the first time we see the full scale of the stamp duty-dodging scandal. Now it is time to . . . to strip away sham companies on and offshore and charge stamp duty on the property hidden inside.’

Read the Sunday Times article here.