Pandora Papers open a box of tax trouble for celeb landlords
Could small-time landlords follow in the footsteps of a King and a former Prime Minister? You may think you’d like to, but think again…
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Many of us have read through the recently released Pandora Papers, that reveal the dealings of the world’s wealthiest individuals. Unsurprisingly, it makes for some eye-opening reading.
The juicy files reveal info such as how former Prime Minister Tony Blair purchased an offshore company that owned a house in London, saving his family hundreds of thousands of pounds in stamp duty. However, no rules were broken by the Blairs in doing this. As we come up to a week since the stamp duty holiday was scrapped, there will be plenty of landlords around the country feeling pretty put out at this nifty book-keeping move.
Blair isn’t the only high profile landlord with dirt to be dished though. There’s some royal dodgy dealings to be discussed too. It seems that the King of Jordan secretly bought properties in London, Washington, and Malibu, however his lawyers dismiss the report as neither accurate nor up to date.
So exactly how much money is stashed away in offshore accounts ?
It’s impossible to say for sure, but the International Consortium of Investigative Journalists report estimates between $5.6 trillion to $32 trillion (around £4.1 trillion to £23.5 trillion). Yes, that’s a T. TRILLION.
According to the International Monetary Fund, tax havens like those revealed this week in the Pandora Papers cost governments around the world up to £440 billion in missed taxes every single year. As the Budget creeps nearer, and the average UK tax-payer steels themselves for tax hikes that we fear will come to help plug the Covid shortfalls, this is understandably a bitter pill to swallow.
But are the super-rich breaking any rules? People can lawfully avoid paying some taxes by relocating their money or forming corporations in tax havens, although this is widely regarded as unethical.
Tax evasion, according to the UK government, ‘involves functioning within the letter, but not the spirit, of the law.’
The United Kingdom has been chastised by red top newspapers over the years, for allowing the property investors and landlords to own anonymous foreign corporations.
The leak of the papers was praised by British-based Oxfam International, for exposing blatant cases of selfishness that deprived governments of tax revenue that could have been used to fund programs and projects for the greater good.
In a statement, they said:
This is where our missing hospitals are. This is where the pay-packets sit for all the extra teachers, firefighters, and public servants that we need.
Whenever a politician or business leader claims there is ‘no money to pay for climate damage along with innovation, for more and better jobs, or for a fair post-Covid recovery, or more overseas aid, then they know where to look.
According to a 2019 parliamentary study, the UK system attracts ‘money launderers,’ who may want to ‘utilise the property market to conceal unlawful profits.’
According to the report, criminal investigations are frequently hampered, since authorities are unable to see who ultimately owns the properties. The leak shows a tsunami of people caught up in this activity.
For details on how to stay on the right side of UK landlord tax, make sure to join us for the Landlord Tax webinar series. We’re covering every element of landlord tax, but helping make sure you are not only above board, but also acting ethically – something few of these celebs would do well to take a listen to.
You can register for the second on the free series here: Mashroom Landlord Tax Webinar