No choice really

The draft proposals will aim to modify the Controlled Foreign Companies legislation, which taxes UK-based companies on their overseas earnings. Companies, including Sir Martin Sorrell\’s WPP, have left the UK over the tax.

The current CFC rules are illegal under EU law.

As they found out with Cadbury and Vodafone.

And a measure that will please Ritchie and Arnald:

George Osborne is set to announce that even properties bought through offshore companies will be subject to 5pc stamp duty, rather than 0.5pc rate they can currently pay.

Although maybe it won\’t. For what it does show is that the solution has always been in domestic hands, there\’s no need to deconstruct \”offshore\” to get the transactions taxed. So it\’ll be a bit of a mixed bag for them.

2 thoughts on “No choice really”

  1. Maybe we’ll see (or not see to be exact) more Italian style deals, money under the table. It may take a while though, the Italians have had a long history of mattress stuffing (since the 1980’s IIRC private savings raid).

  2. Super Sam, of course that is evasion is (and has always been) illegal.

    Of course the fact of the matter is that most property conveyance involves a solicitor at some point. The solicitor is ethically (and legally) obliged to ensure that the conveyance of a property (either directly or though the share transfer of a company) is carried out according to law. If you want to guarantee clear title (which is actually quite tricky under UK property law) you do need to do things properly. The notion that someone will take a risk of losing all of thier property rights to a £10million property by failing to secure clear title in order to avoid a bit of stamp duty are pretty unlikely.

    It is one reason to justify lawyers being involved in property transactions, they owe a professional duty to ensure the law is complied with during the conveyance which will include complying with stamp duty provisions such as this.

    So Tim you are absolutely right, the avoidance of stamp duty is a matter of UK law and nothing to do with the nefarious goldstien which is “off shore finance”.

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