Wednesday, October 27, 2021

The super-rich “can avoid stamp duty because the government is tinkering with property tax”

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A decade of changing property tax rules has enabled the Blairs and Russian billionaires to avoid payments, alleges Rothenburg, as he calls for an “urgent simplification” of the rules

The government is to blame for tax evaded real estate deals that enabled Tony and Cherie Blair to avoid a £ 312,000 stamp tax, a leading management consultancy alleged.

Blick Rothenberg believes that nearly “a decade of tinkering with property tax rules” has allowed the Blairs and Russian billionaires to avoid tax payments, and says the rules “urgently need to be simplified”.

Robert Pullen, tax partner for the London firm, said the Pandora Papers, which also revealed millions of donations from Russian oligarchs to the Conservative Party, “cast a cold light on the chaotic world of high-value real estate transactions.”

Mr. Pullen said: “The tax regulations that apply to the acquisition of real estate are known to be complicated, not supported by successive tinkering and changes from year to year by the government, especially since 2012.”

Prior to 2012, the tax regime for a company to own high quality UK home ownership was financially attractive, especially to non-resident individuals.

“The government has recognized this,” added Mr. Pullen, “but instead of amending the law extensively in one go, they decided to run an almost decade-long campaign of small changes to gradually undermine the benefits.”

There has been at least one change in the taxation of UK property every year since 2012. These include:

“Despite all of these changes, it was and is always perfectly legal for individuals to purchase a property already owned by a company instead of buying the property directly,” said Pullen.

“As a result, no SDLT is charged and instead a stamp tax of 0.5% is levied on the purchase of the company’s shares. This is mainly the reason for the tax savings highlighted in the Pandora Papers. “

The Pandora Papers revealed the financial dealings of 35 current and former world leaders.

The documents show that the Blairs took possession of the property, a £ 6.75 million townhouse in Marylebone, London, by buying the offshore company that owned it.

By buying this indirect route, they were able to avoid stamp duty when buying. There is no evidence that the Blairs acted illegally.

Mr Pullen called on the government to simplify tax rules on property purchases and close loopholes that benefit the super-rich.

He added: “The government needs to correct this and not only consider introducing a public property register, but also consider a way to simplify tax rules, reverse the ridiculous mountain of laws put in place since 2012, and unite To offer way for trapped individuals. “In the process of closing the companies neutrally.”

A Treasury Department spokeswoman said: “Our tax system is designed to ensure that the richest pay their fair share of their property and fortune and, as of 2010, the UK government has over £ 250 billion including an additional £ 3 billion from those trying to raise money abroad to hide.”

The Blairs deny any attempt to avoid paying taxes.

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