Oh my, this is just too precious:
Guardian readers seem to be under the illusion that it is owned by a not-for-profit charity. The Scott Trust was wound up in October 2008 and the Guardian is a for-profit-privately-owned business, the well paid directors of which confirm in their annual accounts that they operate tax strategies in line with their fiduciary duty to the shareholders – just like any other business.
The old Scott Trust was set up in 1936 to avoid inheritance taxes and wound up in 2008 so that GMG could cynically exploit the SSE capital gains tax shelter to pay 0% in corporation taxes on their £302 million in profits that year. GMG claim that it was about modernising the holding structure, in fact it was a disingenuous cover for corporate venality.
I think I\’m reading Guido correctly here.
OK, so, The Guardian was owned by the Scott Trust. As was Autotrader etc.
So, when Autotrader was sold, they would have to pay corporation tax (or would it be capital gains?) on the money they made from selling Autotrader. I think I\’m right in saying that charities are only free from such taxes when they relate to charitable activities, not to commercial subsidiaries.
But, Gordon Brown and Ed Balls had changed corporation tax law. If you were a limited company (not a charity) selling off a subsidiary and reinvesting the money, then you would not pay corporation tax on that capital gain.
The implication here (and I would love someone to detail this, correct me on it) is that such a tax free disposal of a subsidiary/investment would not be available to the Scott Trust under the rules that applied to them.
So, the solution is obvious: wind up the Scott Trust, restart it as a limited company and hey presto, there no tax is due on the sale of a subsidiary.
In October 2008 it was announced that the trust was being wound up and its assets transferred to a new limited company named The Scott Trust Limited. The purpose of this change was to strengthen the protection it offers to The Guardian.
And that\’s what they did. They wound up a charity and converted it into a limited company because the tax laws were better as a limited company than as a charity.
And remember people: these are the high and mighty who are tutting at everyone else about tax avoidance!