Adrian Black delivers critical property market insights and the influences, behaviour and money driving them.
Offshore company tax efficiency and confidentiality opportunities (perfectly legal) have attracted investment in West Prime Central London “PCL” residential properties and have been a significant factor in driving price rises.
The graph below plots spend on West PCL residential property for those transactions reported at the Land Registry and for data available for offshore companies (which is not reported by the Land Registry) based on sources provided by PRIVATE EYE.
We analysed the offshore company investments that are most likely to represent individual residential properties (in other words we excluded purchases for developments and commercial property transactions). Offshore companies are often used by developers as special purpose development vehicles - and we wanted to focus on the “end-user” data.
The proportion of spend through offshore companies that have enjoyed many tax avoidance advantages has grown dramatically. The government is beginning to focus on this constituency advantage as we have highlighted in previous blogs http://www.youhome.co.uk/estate-agents/notting-hill/blog/98-autumn-statement-more-tax-on-london-property?blog_id=adrian_black_and_jeremy_priestley_blog and http://www.youhome.co.uk/estate-agents/notting-hill/blog/86-expect-more-ated-tax-take?blog_id=adrian_black_and_jeremy_priestley_blog
I expect more focus and the government to try increase tax take in this area - so more Stamp Duty Land Tax possibly, more Annual Tax on Enveloped Dwellings, a continuing focus on removing Inheritance Tax exemptions and potentially a Void Tax on empty homes.
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