On 3 June this year, in response to a question from Ian Davidson MP, the Prime Minister David Cameron announced in the House of Commons that he would co-operate with the Scottish Affairs Committee in establishing who owns and controls the great landed estates in Scotland (see previous post for further details).

Mr Ian Davidson (Glasgow South West) (Lab/Co-op): I welcome the statement from the European Council and the Government, which says that proper information on “who really owns and controls each and every company” will be provided. Will the Government co-operate with the Scottish Affairs Committee in establishing who owns and controls the great landed estates in Scotland, in order that they can minimise both tax avoidance and subsidy milking?

The Prime MinisterThat is the intention of this move. Having all countries sign up to an action plan for putting together registers of beneficial ownership by companies and the rest of it will help tax authorities to make sure that people are paying tax appropriately. That is a debate that we are leading at the G8 and in the European Union, and that should apply—we hope—to every country.

Tarbert Estate on Jura is popularly believed to be owned by Mr Cameron’s stepfather-in-law, William Astor. In fact, it is owned by Ginge Manor Estates Ltd., a company registered at PMB 58, Nassau, Bahamas. [SEE UPDATE] The name is a bit of a giveaway – Ginge Manor is a manor house in Oxfordshire and the home of William Astor. Indeed it is where David Cameron married Samantha Gwendoline Sheffield on 1 June 1996.

Now, William Astor is a member of the House of Lords. He legislates on matters to do with tax and corporate affairs. So I was sure that he would declare his interests (if he had any) in his Jura estate. In the House of Lords Register of Lords’ Interests, he declares no interest in Tarbert Estate although he is a Partner in Tarbert Estate Partnership (farm and sporting).

I contacted the officials responsible for maintaining the Register to check that, in fact Mr Astor had no further interest in the estate. They said that the matter would be investigated. Meanwhile I emailed him directly and he replied that his children, Flora, William and James, owned the beneficial interest in the Bahamas company.

Now that he is spending some time on the island of Jura, Mr Cameron has the opportunity to do a little investigation for himself and confirm, as the EU Council proposes, who really owns and controls Ginge Manor Estate Ltd.  Given that he is renting property owned by a company in the Bahamas, he might also ensure that the company is following the rules of the HMRC Non-resident Landlord Scheme.

Other than that, I hope he and his family enjoy their holiday. Jura is a fine place.

UPDATE 3 February 2015

On 24 November 2014, ownership of the estate transferred to Altar Properties Ltd. in the British Virgin Islands.

Yesterday in the UK Parliament, the Prime Minister confirmed that he would co-operate with the Scottish Affairs Select Committee to establish “who owns and controls the great landed estates in Scotland, in order that they can minimise both tax avoidance and subsidy milking.”

In a debate following a statement on the recent European Council meeting called to discuss energy policy and tax evasion, Ian Davidson MP, the Chair of the Scottish Affair Committee raised the topic of transparency in landownership in Scotland (Column 1254 Hansard)

The Prime Minister: My hon. Friend makes an important point. The draft Bill that we produced also had huge amounts of pre-legislative scrutiny. We have to recognise that there will always be civil liberties concerns about this issue, so we should look at how we can start moving the debate on, recognising that there is a block of telephony covered by fixed and mobile telephony that is dealt with. As we move to more internet-based telephony, how are we going to help the police deal with that? We may have to take this in short steps, so that we can take the House with us and listen to concerns about civil liberties, but I am convinced that we have to take some steps, otherwise we will not be doing our job.

Mr Ian Davidson (Glasgow South West) (Lab/Co-op): I welcome the statement from the European Council and the Government, which says that proper information on “who really owns and controls each and every company” will be provided. Will the Government co-operate with the Scottish Affairs Committee in establishing who owns and controls the great landed estates in Scotland, in order that they can minimise both tax avoidance and subsidy milking?

The Prime Minister: That is the intention of this move. Having all countries sign up to an action plan for putting together registers of beneficial ownership by companies and the rest of it will help tax authorities to make sure that people are paying tax appropriately. That is a debate that we are leading at the G8 and in the European Union, and that should apply—we hope—to every country.

This is a topic I raised with the Scottish Government in my evidence to the Land Registration Bill last year in which I argued that we should simply make it incompetent to register a title in the name of any corporate entity incorporated in a tax haven. This was rejected by Fergus Ewing on the basis that it would deter inward investment.

Given that the Land Reform Policy Group has decided to rename itself the Community Ownership Review Group, lets hope that David Cameron and Ian Davidson might be able to advance matters.

 

The Mirror carries a report today (13 April 2013) that the house that Margaret Thatcher lived in for the past 20 years is “owned” by a company called Bakeland Property Company Ltd. registered in the British Virgin Islands. The story is a little confusing and conflates ownership with leasehold. The fact that the house is owned offshore was first reported by Rob Evans and David Hencke in the Guardian in 2002.

In England and Wales, land is owned on a system of Freehold and Leasehold whereby Party A may be the Freeholder but may grant a lease to Party B (the leaseholder) of, for example 100 years. The property is thus “owned” by both parties simultaneously. In the case of 73 Chester Square (pictured above on Google Streetview) there are actually three parties with an interest in the property. (1)

1. The Freehold is owned by the Trustees of the Will of the Most Noble The 2nd Duke of Westminster.

2. There is a lease (Title NGL534189) for 200 years from 25 March 1984 of No.73 Chester Square and other land in favour of Grosvenor Estate Belgravia, 70 Grosvenor Street, London, Company No. 01138134.

3. There is a sub-lease (Title NGL688804) from Grosvenor Estate Belgravia to Bakeland Property Company Ltd. from 18 October to 25 December 2030 and a further sub-lease (Title NGL740241) from Grosvenor Estate Belgravia to Bakeland Property Company Limited for 59 years and 167 days from 12 July 1996 to 26 November 2055. (2)

Bakeland Property Company Limited is a company incorporated in the British Virgin Islands with its Registered Office at Essanestrasse 91, Po Box 341, L1-9492, Eschen, Liechtenstein and c/o Collyer-Bristow, 4 Bedford Row, London WC1R 4DF.

Assuming that the leasehold interest was held by Bakeland Property Company Limited on behalf of the late Mrs Thatcher (who thus had a proprietorial interest in the house as opposed to simply being a tenant and having no connection with Bakeland), that the beneficial interest is inherited by her children Mark and Carol, and that, as the Mirror claims, the house is currently worth £6 million, then both inheritance tax at 40% (£2.4 million) as well as Stamp Duty Land Tax at 7% on any subsequent sale (£420,000) will be avoided.

The new Stamp Duty Land Tax rate for residential properties owned by corporate bodies of 15% only applies to properties acquired since 21 March 2012 and will not apply where the legal title remains in the same name and only the beneficial ownership of an offshore trust or company changes.(3) It may well be the case that Bakeland is owned by trusts whose beneficiaries are people other that the late Mrs Thatcher but because offshore companies are usually run by nominee Directors and owned by at least one offshore trust, the identification of the precise beneficial interest is extremely difficult.

And that is one of the legacies of Mrs Thatcher’s property-owning democracy. (4)

 

(1) There are 4 parties if you include the fact that Freeholders are not absolute owners but hold their land from the Monarch who is the only person capable of owning land “absolutely” in England and Wales as this entertaining exchange of emails with the Land Registry demonstrates.

(2) Thanks to @MrsTrevithick for alerting me to fact that Bakeland was, until 1996 registered in Jersey. This explains why there are two leasehold titles in the name of the same company – actually two different companies with the same name.

(3) See Treasury Consultation “Ensuring the fair taxation of residential property transactions” for details of proposed changes in the taxation of residential property owned by non-natural persons (e.g. offshore companies).

(4) In searching for the titles to 72 Chester Square I mistakenly typed 73 and obtained the title of No. 73 next door (Title NGL889003). It is owned by 72 Chester Square Limited incorporated in Liberia.