in the back
Mapeley revisited
HMRC, Issue 1452
OFFSHORE BREEZE: Liverpool’s historic India Buildings, home of HMRC – and some juicy tax breaks
AS THE sun sets on its infamous deal to sell its offices to a Bermuda company and rent them back for 20 years (Eyes passim ad nauseam), HM Revenue & Customs is busy signing a series of deals for large regional “hub” offices to replace them. After its excoriating experience with Mapeley Steps and Bermuda, is the department eschewing tax-reducing transactions this time round? It seems not.

Under the first of the three deals – for office blocks in Liverpool, Cardiff and Bristol – HMRC has “pre-let” buildings that are being redeveloped under so-called “forward funding agreements”. These involve developers selling the sites to insurance company Legal & General before they are redeveloped, with an agreement to perform the necessary work and with the tenancy (with HMRC) conditional on its completion.

The advantage of this structure over the more straightforward option of developing the land and then selling it to the new landlord is that stamp duty land tax (SDLT) is charged only on the smaller, pre-development value. With the uplift in most cases likely to be in the tens of millions of pounds, and SDLT levied at 5 percent, the savings are impressive.

Even juicier tax breaks
At the new offices in Liverpool’s historic India Buildings, the tax breaks look even juicier. Legal & General has just announced that “the developer is Marwees India Buildings with Shelborn Asset Management as the development manager”. Shelborn boss Brian Rabinowitz told the Eye there was no such company as the former one. The building is owned by Marwees Ltd, which, although currently listed on Land Registry records as a British Virgin Islands company, is now, he said, a Guernsey one.

The switch could be related to 2016 tax changes that deemed non-resident companies buying and selling even a single UK property to be taxable on the profits of doing so in the UK. But where there is a tax agreement between governments, such as exists between the UK and Guernsey, the offshore company has to have a permanent setup in the UK before it can be taxed. The Guernsey company with a UK manager might enable Marwees to say it does not.

Party like it’s 2001…
Rabinowitz said he had “no idea” who the owners behind Marwees are. He also refused to discuss his own sketchy record when it comes to dealing with the taxman. In 2014 the high court served a winding-up petition on another company of his, Brampton Asset Management Ltd, over unpaid tax before the order was rescinded after it presumably coughed up.

There was no such reprieve for a company called Candelabra Ltd. It ran the Jewish orthodox Menorah High School for Girls in Dollis Hill, set up by Rabinowitz and another businessman in 2001, until 2010. Then it went into liquidation, owing the taxman £680,460.

The school nevertheless continues to function as a voluntary aided (ie taxpayer-funded) faith school through the Menorah High School for Girls Foundation Trust. It acquired the site occupied by the school and then made some money selling off part of it. Rabinowitz remains a trustee and the school’s deputy chair of governors. Meanwhile, there’s no sign taxpayers got any of their money back.

What with offshore companies, stamp duty wheezes and mysterious property magnates, down at the tax office it’s just like 2001 all over again!

More top stories in the latest issue:

A huge money-laundering case before the US, UK and Nigerian courts raises some tough questions for British bank Standard Chartered.

The new Pubs Code that was meant to help free publicans from the hated beer tie to avaricious ‘pubco’ landlords is helping hardly anyone at all, it emerges.

The Department for Education is still collecting data on children’s nationality and country of birth via a controversial question on the school census.

Funding rules meant to stop companies selling educational services to multi-academy trusts that they are also sponsoring are being ignored yet again.

As Scope becomes a ‘pan-disability’ lobbying outfit, adults with cerebral palsy are left with no major national charity to represent their interests.

Some disabled people are facing the extra burden of 20% VAT when making direct payments to the assistants who help them try to lead independent lives.

Ministers have so far ignored a plea for an extra £350m for the NHS – leaving some Tory MPs with volatile electors not at all happy about NHS austerity.

The privatised probation service in Gloucestershire, run by Working Links, gets one of the worst reports so far from the Probation Inspectorate.

More on Sussex park home owner Barry Weir, who is accused of making residents’ lives a misery through excessive charges, fees, bills and threats.

A mother’s battle over the death of her son at an Essex mental health unit leads to a police probe into the fate of about 25 patients going back over 17 years.

To read all these stories in full, get the latest edition of Private Eye - you can subscribe here and have the magazine delivered to your home every fortnight.

Next issue on sale: 19th September 2017.
More From This Issue
More From Private Eye
Only In The Magazine
Private Eye Issue 1452

ONLY £1.80

19th September 2017
In This Issue private eye
Fleet Street Joy That New Royal Baby Supplement Is on the Way… Remainers Optimistic Brexit Will Never Happen Due to Nuclear War… Relief as Hurricane Diana Finally Recedes… Isis Welcomes Driverless Trucks… Parents Furious as St Cakes Found Not Cheating at Exams… Me and My Spoon with John Humphrys… Why Didn’t Flood Victims Have Guns? Asks National Rifle Association… Trinny Woodall’s Diary, as told to Craig Brown

And also...

- Odd fellow: Arron Banks tells voters to join the Tory party!
- Cashscroft’s back:
Tory peer digs deep for Dave’s successor
- Dread Arrows:
RAF team flies into a political storm

For all these stories you can buy the magazine or subscribe here and get delivery direct to your home every fortnight.

Private Eye Issue 1451