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Sunday, 27 November 2011

One Hyde Park: Parliament's Gift to the Super-Rich

One Hyde Park is London's most prestigious residential address. Developed by a Guernsey-based company, its 80 apartments are designed for the super-rich: the most expensive sold for £136 million according to a report in today's Observer.

Sixty two apartments have been sold. Just nine have been registered for Council Tax (capped at an annual £1375 on each apartment) with five owners claiming second home discounts. Westminster City Council is now trying to track down the owners of the others and get them to pay up. They may have to doorstep them, if their officials can get past security and into the building.

Even more significantly, an estimated £750 million in stamp duty has been avoided by buyers using a relatively simple device. (It's unclear from The Observer whether this device was available to the original buyers or only to those buying second hand).

Instead of claiming ownership yourself when you buy one of these flats, you assign ownership to a company based (in most cases) in The British Virgin Islands - and a separate company for each apartment. Then when you want to sell, you don't sell the flat, since stamp duty would be payable, you sell your Virgin Islands company. The buyer gets the flat as the sole asset of the company. Simple, elegant - and a scheme licensed by the UK Parliament just a mile down the road.

That's because the British Virgin Islands, like the Caymans, Guernsey, Jersey and the Isle of Man, is one of those bogus jurisdictions created by Parliament and endowed with offshore rights solely in order to allow the rich and the super-rich to avoid their fair share of UK taxation.

I suppose the residents of One Hyde Park think to themselves, We're All In It Together. I am sure they pay up for the Door Security.

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