Revealed: £400m of Norfolk and Suffolk property bought by offshore firms
PUBLISHED: 06:31 12 January 2018 | UPDATED: 11:31 12 January 2018
From prime offices and new homes to industrial estates and top shops, we can today reveal the properties in Norfolk and Suffolk bought by companies in offshore tax havens.
Offshore sales have boomed in recent years with 2015 a record year in Norfolk. That year there were 84 offshore property transactions and another 48 in Suffolk. In 2017 there were 49 sales in Norfolk and 42 in Suffolk.
The biggest overseas buyers of property in East Anglia are firms registered in Guernsey followed by Jersey, the British Virgin Islands and the Isle of Man. Offshore firms have spent more than £400 million on property in Norfolk and Suffolk since 2015, according to data from the Land Registry.
But the real figure will be much higher as only a third of the 300 properties sold have a sale price on the Land Registry.
Offshore sales have angered transparency and tax campaigners.
Buying through offshore firms makes it difficult or even impossible for communities to find out who is the ultimate owner of land or buildings and a legal loophole means the tax bill when the property is sold on can be slashed by thousands of pounds.
A HMRC spokesman said the Government changed the law in 2016 to make sure non-UK residents were taxed on profits from developing or dealing in UK property.
But offshore companies still do not have to pay capital gains tax on commercial property sales, meaning thousands of British offices and shops continue to be bought each year by companies in tax havens. The Government announced a consultation on changing that law in its last budget.
The new Wickes store on Hellesdon Hall Road was bought for just under £6m by a company registered in the British Virgin Islands called Dakota Properties Limited in March 2017.
It is not possible to search a register of companies for the British Virgin Islands to find out who is behind that firm.
In the city centre, offshore companies have also bought up prime retail spots.
The building which houses Nando’s, numbers 23 to 25 Red Lion Street, and numbers 19 to 21 was bought for £2.7m by a company in the British Virgin Islands called Balavan Limited in August 2016.
Balavan’s address in the British Virgin Islands is c/o Mossack Fonseca, the Panamanian law firm from which there was a huge leak of data called the Panama Papers in 2016.
Nearby 10 Haymarket in the city centre, where the Card Factory shop is, was also bought by an offshore firm in Liechtenstein in 2017 called Bellborough Limited, for just under £3m.
A Jersey firm meanwhile, called Gatsby Capital 2, bought numbers 2 to 10 Back of the Inns where Bill’s Breakfast and Diner is.
And one of Norwich’s biggest buildings, the old Royal Hotel on Bank Plain was bought by a Guernsey company for £3.15m in February 2017. The firm was set up the year before the sale and lists its activities as buying, selling and renting.
The biggest offshore buyer of commercial property in Norwich since 2015 is a Jersey firm called KFIM Liput 1 Limited, which stands for Knight Frank Investment Management.
According to the Land Registry, they bought The Oaks on Delft Way by Norwich Airport where Brewers Fayre is for £8m in August last year.
They also bought the land and buildings off Drayton Road where Aldi and Home Bargains is for just over £8m in May 2017.
Meanwhile, the former Aviva offices on Surrey Street called St Stephens Towers, which will be converted to student accommodation were bought by a company in the Netherlands.
The firm, CSH 4 Norwich, paid £7.68m for the tower block in May last year.
The biggest offshore property sale in North Norfolk since 2015 was to a Jersey company which spent £4.38m buying North Norfolk Retail Park on Holt Road in Cromer in September 2016.
The firm called Kames Capital UK Active Value II Nominee 1 Limited, is owned by two other companies also registered in Jersey.
They in turn are owned by another Jersey company called Saltgate Ltd which is an “alternative investment service”, according to its website.
In Aylsham, meanwhile, a company registered in Guernsey called Adriatic Land 4 Limited bought land at St Michaels Avenue in November 2016. The land is on a new housing estate.
Adriatic Land and its sister companies have frequently bought land on new housing estates, meaning they own the freehold on the new homes. They also bought part of the Queen’s Hills Estate in Costessey in June 2016.
The selling of freeholds on new homes has been criticised by MPs. It means homeowners have to pay ground rent to the companies which own the freehold and also have to ask the companies permission to make changes to the home.
The Government has said it will change the law to stop house builders selling the home’s owner just the leasehold and selling someone else the freehold.
In December, communities secretary, Sajid Javid said: “It’s unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms.”
Tax expert Richard Murphy from Ely said there had been a clamp down on offshore tax loopholes for residential properties but not commercial ones, meaning offshore companies in tax havens were still being used to buy commercial land.
The freeholds on new south Norfolk housing estates have also been bought by offshore firms registered in Guernsey. At Mulbarton a firm called Abacus Land 4 Ltd bought land at Wheatfield Road in June 2017.
In Diss a Jersey company called Abacus Land 1 (Holdco 1) Ltd bought up land where new homes have been built to the east of the town centre off Sawmills Road.
A similarly named firm called Abacus Land 4 Limited, but this time based in Guernsey, bought land at Tudor Rose Way and Doune Way in Harleston.
In Wymondham, meanwhile, a company called Medicx GPG Holdings Ltd bought land for £2.7m on the north side of the B1172 London Road.
One of the biggest offshore sales in the region was for two care homes in Thetford, one in Ipswich and one in Bury St Edmunds, bought for £21.8m by a Jersey firm called KFIM Liput 1 Ltd in March last year.
In King’s Lynn parts of the Hardwick Industrial Estate have been bought by a company in Jersey called M7 Real Estate Investment Partners V Prop Co Ltd for £5.25m in August 2017.
A Luxembourg company, meanwhile, called Chariot Investment Holdings 3 S.A.R.L bought land on the east side of Church Street in King’s Lynn in March 2017.
Pentney Park Caravan Site in Pentney was also bought by a firm in Guernsey for £ 1.45m called Butterfield Bank in July last year.
Airspace above Downham Market, Watton, King’s Lynn, Heacham, Dersingham and Wisbech have all been bought by a Hong King company in the last two years called Salcon Power Ltd to build solar panels.
•YARMOUTH AND WAVENEY
A British Virgin Islands company called Perekin Ltd bought land at St Olaves Marina.
A firm from the islands also bought 87 to 89 Magdalen Way in Gorleston where McColls is.
In Hopton, meanwhile, a care home was bought by a company in the Seychelles called Kanbai Kurji Homes Ltd for £1.5m in 2016.
In Lowestoft the biggest sale was The Britten shopping centre on London Road North which was sold in March 2015 for £6.65m to a Jersey firm named Wayshop 2 (Lowestoft) Limited.
•The advantages of offshore
There is nothing to stop foreign firms from buying UK property and no suggestion these firms are doing anything illegal.
But where commercial property is sold on by an offshore firm, a legal loophole means overseas companies can avoid paying the same stamp duty land tax and capital gains tax which British firms would have to pay.
Buyers pay stamp duty when the property is bought, but when it is sold on through an offshore firm, that tax can be avoided by only selling the shares in the offshore company which owns the property rather than the property itself.
By selling just the shares, the new buyer avoids stamp duty, which can reach 4pc on commercial property.
Tax expert Richard Murphy said foreign sellers can also avoid capital gains tax on profits they make from selling UK commercial property which can reach 28pc - a loophole the government said in its last budget it would close.
The two tax loopholes cost the British taxpayer billions of pounds a year.
•There is no suggestion the firms occupying or renting the buildings and land named in this article were involved in the offshore sales.