The Loophole

December 11, 2017 Opinion , OPINION/NEWS

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By

Ricardo Swire

 

Tax havens are a dynamic force in the rise of global inequality. As disparity grows offshore tax evasion becomes an elite sport. In early December 2017 the European Union released an updated “Blacklist” of uncooperative tax havens, American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad & Tobago, Tunisia and United Arab Emirates the named jurisdictions. The listing means these countries could lose access to EU funding and sustain sanctions.

Legislation was passed in the Caribbean prohibiting disclosure of information regarding beneficial owners of offshore companies, foundations, trusts and bank accounts. Leaked corporate documents have identified several British celebrities who own luxury holiday homes in Barbados. The villa-style residences, situated in Sandy Lane, Royal Westmoreland and other popular up-scale estates, sell for as much as US$10 million or £7.5 million each. Such luxury properties are purchased via offshore companies. Foreign elites avoid local tax payments when these properties are re-sold.

Barbadian law stipulates if a house is purchased by a local resident or business, the buyer pays 1% stamp duty and 2.5% transfer tax. In 2007 Barbados reduced its original 7.5% transfer tax and adjusted the rules, allowing foreign nationals unlimited repatriation of property sales money. Companies in the British Virgin Islands (BVI) can officially transact business in Barbados. Such facilitation allows British tax exiles to buy Barbadian residences through a BVI company tax-free and immediately transfer profits overseas.

The worldwide corporate registry leak exposed names of approximately one thousand British directors of companies registered in the BVI. Goalhanger Inc is one analogous BVI registered company. Legendary English ex-national football captain, Gary Lineker, who represented Barcelona, Leicester and Tottenham is its director. In 2005 the celebrity used Goalhanger Inc to buy a Barbadian £2.2 million villa. In 2010 he resold the colonial style, five bedroom, marble bathrooms with swimming pool mansion in the Royal Westmoreland Golf & Country Club development St James, taking advantage of the Barbados/BVI corporate “no tax” arrangement.

A famous English ex-cricket captain and his wife also owned a BVI company registered to purchase Barbadian property. The sixty year old English cricketer arranged the re-sale of his tropical island residence through the family attorney, capitalizing on the available tax shelter facility. Another prominent ex-England cricket team member and Middlesex club bating legend is a BVI company director attempting to sell his Barbadian property.

 

 

 

 

Ricardo Swire - Tuck Magazine

Ricardo Swire

Ricardo Swire is the Principal Consultant at R-L-H Security Consultants & Business Support Services and writes on a number of important issues.

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