'Millions Avoided in Tax on St Enoch Deal'

By Howarth, Angus | The Scotsman, November 8, 2017 | Go to article overview

'Millions Avoided in Tax on St Enoch Deal'


Howarth, Angus, The Scotsman


Private equity firm Blackstone avoided tens of millions of pounds in UK taxes on property deals in Glasgow and London, it was reported last night. According to a national broadcaster, the leaked Paradise Papers reveal the company used offshore companies to purchase and operate the St Enoch Shopping Centre in Glasgow and the Chiswick Business Park in London.

The papers reportedly show how accountancy firms developed strategies to minimise or avoid tax.

Blackstone yesterday said its investments were "wholly compliant with UK tax laws".

The company is one of the world's biggest private equity groups.

It was reported that leaked documents from the offshore law firm Appleby show how the group structured two major UK property deals.

Top accountancy firms allegedly issued documents to Blackstone outlining how it could use trusts in the tax haven of Jersey and a complex structure of companies in Luxembourg for the purchase of both Chiswick Park and the St Enoch Centre.

The company bought the St Enoch Centre, which houses almost 100 stores, for about £190 million in 2013.

Documents reportedly show it would have avoided stamp duty of £7.6m and corporate tax on up to £10m in annual rental income.

Blackstone purchased Chiswick Park, a 33-acre office development in west London, in 2011 for £480m. The majority of the site was then sold to the Chinese government for £780m in 2014.

According to reports, the data suggests Blackstone's tax structures allowed it to avoid about £19m in stamp duty on the purchase.

The tax structure also meant it could avoid tax of up to £30m annual rental income, and capital gains tax on the sale of the business park, which could have been tens of millions of pounds.

Blackstone said: "Blackstone's investments are wholly compliant with UK and international tax laws and regulations. The property investment structures in question were acquired from institutional investors and are of a type commonly used for decades for investments in UK real estates, including by listed companies and a variety of institutional investors, and were adopted after appropriate advice was taken from leading tax and legal advisers. …

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