June 20 2013 Latest news:
Josh Pettitt and Tim Lamden
Monday, March 4, 2013
The taxman is set to raise at least £1.1million a year from super-rich homeowners who live in one of the capital’s most exclusive streets, the Ham&High can reveal.
More than half of the luxurious mansions along The Bishops Avenue are owned by offshore companies – which use complex ownership structures to shield owner’s identities.
But come April 1, any of the 43 homes in the exclusive street worth more than £2million and owned by companies, will come into the taxman’s sights under the new Annual Residential Property Tax.
The tax will apply across the country – with homes worth £2-20million forced to pay £15,000 to £70,000 annually, and mansions in the £20million-plus category liable for £140,000 a year.
The amount the taxman will collect from 20 homes in The Bishops Avenue owned by companies, which the Ham&High has valued through land registry searches, is £1.1million.
But the final levy for the exclusive street – known as Billionaires’ Row because of the Russian oligarchs and Saudi royals who live there – is expected to be closer to £2million annually for the 43 properties owned by companies.
It is not illegal to own properties in this way, but officials from Her Majesty’s Revenue and Customs (HMRC) have pledged to pursue the individuals behind the companies to contribute to the public purse.
Conservative MP for Finchley and Golders Green, Mike Freer, said: “The ability to make offshore companies pay a fair amount of tax is justified provided it’s not punitive and does not drive away investment and I think this has probably got it about right.”
Hampstead Garden Suburb resident Dr Saul Zadka has previously called on the mystery owners to sell-up to prevent the exclusive address from becoming a “ghost street”.
* 43 homes in The Bishops Avenue in Hampstead Garden Suburb are owned by companies.
* Some of the companies are registered in the British Virgin Islands, the Bahamas, Liechtenstein, the Isle of Man and Guernsey.
* Buyers have previously opted for this ownership structure to pay a lower level of stamp duty and keep their anonymity.
* The Annual Residential Property Tax will apply to all properties owned by companies from April 1, but some companies will be able to apply for tax relief.
* Companies which own homes worth £2-5million will pay £15,000, £5-10million will pay £35,000, £10-20million £70,000, and £20million+ £140,000.
He urged HMRC to levy a higher tax on the high-value properties and said: “I don’t think it will change the landscape of the street, simply because these companies will be willing to incur these extra costs.
“They don’t care about an extra cost to their properties and they will continue to keep them.
“I don’t think this will change a lot, apart from swelling the government’s coffers. But it is a move in the right direction.”
Estate agent Trevor Abrahmsohn, whose company has sold more than £3billion worth of property in the street, warned against targeting the super rich.
He said: “The tax raised from this will be buttons. It doesn’t amount to a lot for the Chancellor of the Exchequer, maybe a few hundred million across the country. Taxes have got to raise billions to make any difference.
“These people set up businesses, employ people, they buy properties.
“They are part of the wealth of the nation, so let’s not vilify them.”
Others speculate about whether HMRC will be able to navigate the complex web of offshore ownership to collect the tax.
But officials have pledged not to let owners hide behind the “corporate veil”.
Tax office officials say data banks will be used to “uncover hidden relationships between people and organisations” and gather the tax from companies based in the British Virgin Islands, the Bahamas and Liechtenstein.
A spokeswoman said: “HMRC strives to maintain a level playing field by tackling the minority who try to avoid or evade tax.
“We are committed to making it easier for people to comply with their tax obligations, but a small minority bend or break the rules by deliberately avoiding or evading their taxes – and we are resolute in tackling these people.
“HMRC has all the resources required to pursue this work and is committed to ensuring that those who should pay this tax, do so.”