Revealed: Where offshore firms have been buying in Norfolk, Waveney and Fenland
PUBLISHED: 12:28 19 September 2016 | UPDATED: 14:48 19 September 2016
Offshore firms in tax havens have spent millions of pounds buying land and property in Norfolk. Should we be concerned? Tom Bristow reports.
It is something that has angered transparency campaigners and been blamed for worsening the UK’s housing crisis.
More than 100,000 properties in the UK are owned by foreign companies, and today we can reveal swathes of Norfolk, Fenland and Waveney, including supermarkets, office blocks and industrial units, have also been bought up by offshore firms, in deals often shrouded in secrecy.
Many of those companies are registered in the tax havens of Jersey, Guernsey and the Isle of Man.
Almost 500 properties in Norfolk, Waveney and Fenland, costing at least £700 million, were bought from 2008 to 2014 by firms registered offshore.
The sale price is not available for many of the properties, meaning the actual figure is likely to be a lot higher.
While there is no suggestion that these offshore companies have done anything illegal, concerns have been raised about offshore companies buying property in the UK.
Buyers can minimise stamp duty when the property is sold on, meaning the government has missed out on tens of millions of pounds of potential revenue.
The firms also don’t have to declare who is behind the sale, making it difficult to trace the property’s ultimate owner in many cases.
In May this year, the then prime minister, David Cameron, announced plans to make foreign companies reveal their ultimate owners.
Tax expert Richard Murphy, from Ely in Cambridgeshire, claimed anonymity was the main reason for buying properties through offshore companies.
It could mean that people can’t contact owners of the land or buildings when they have issues or planning disputes.
“If we have anonymous companies, we don’t know they will be held to account,” he said.
The EDP has gone through data dating back to 2008 obtained by magazine Private Eye through Freedom of Information requests, as well as Land Registry figures and Companies House documents to see who has been buying up Norfolk.
The biggest buyers of Norfolk, Waveney and Fenland property are firms registered in Jersey, which bought 111 properties, followed by the Isle of Man and the British Virgin Islands.
Today, we look at Norwich and tomorrow we look at the rest of the region.
The biggest offshore purchases in Norwich since 2010 are:
•Surrey House on Surrey Street
•Shops on St Stephens Street
•The Tesco on Guildhall Hill
•Industrial units in Bowthorpe and Sweet Briar Industrial Estate
Numbers 14 to 18 St Stephens Street, where New Look, Slaters and Lakeland are, was bought by a company in Jersey called Stephen Street Ltd in October 2013 for £8.5m.
Stephen Street Ltd was set up in the Channel Island a few months before the sale in June 2013.
Five people and two companies are listed as shareholders in Stephen Street Ltd. Four of those people have addresses in Israel, but the majority shareholder is another offshore company called Sanne Nominees Ltd, also registered in Jersey.
Sanne Nominees Ltd, is in turn owned by a company called Sanne Fiduciary Services which is also registered in Jersey.
The building was marketed by Tellon Capital which buys retail units across England for investors. Tellon did not return a request for comment.
This example shows just how complex the structure of offshore companies can be.
French bank BNP, meanwhile, spent £7m on Norwich property, buying up Francis Way on Bowthorpe Industrial Estate in 2014, through its Jersey firm, BNP Paribas Securities Services Trust.
Another huge property deal done through Jersey was £6.5m spent on property at Albertine Close on Sweet Briar Industrial Estate through a company called Dockling Ltd in 2012.
Dockling Ltd is owned by two firms also registered at the same Jersey address, called OH Securities Ltd and R&H Investment Ltd.
It is not possible to find out who ultimately owns this firm and therefore who is behind one of the largest sales of Norwich property.
But Labour leader of Norwich City Council Alan Waters said offshore investment should be encouraged in the city.
“Norwich is an attractive, vibrant city and its reputation as a business destination is really growing,” he said. “It is important for the city to continue to attract business of all kinds, so this kind of investment is welcome.”
Norwich Green Party leader Martin Schmierer, however, said the number of offshore property sales in Norfolk was “extremely concerning”.
“The Green Party wants to see small local businesses flourish, because that is in the best interests of the people of this city,” he said.
“Such enterprises are both more likely to employ higher numbers of local people and importantly pay a fair rate of tax.”
Some of Norwich’s most well known retail buildings have also been sold through offshore firms.
They include an unknown sum spent by a firm called Property Partnerships on the Isle of Man for 1 to 3 Guildhall Hill in Norwich 2013 where NWES and Philip Browne menswear are.
Meanwhile, 5 Guildhall Hill, where Tesco Express is, sold for £5.5m to a firm called NewRiver Retail (GP1) in Guernsey in 2010.
The firm is owned by a London company called NewRiver Retail which invests in UK property. NewRiver did not return a request for comment.
James Allen, a senior partner at commercial property agents Roche in Norwich, said: “There have been some overseas investors looking at Norwich but at this stage it remains small.”
Mr Allen said from a commercial point of view, a buyer being registered offshore was not something to be worried about as long as the seller did due diligence.
How it works (and why people do it)
When houses, shops, office blocks or land in the UK are bought by a company registered in another country it counts an offshore property sale.
The offshore firm will sometimes be set up in a tax haven a few months before the sale of the property. Investors own the shares in that offshore firm and that firm is then used to buy the property.
The property’s title deeds are in the name of that offshore firm so it can be impossible to find out who ultimately owns the property. On the Land Registry documents, the owner is named as the offshore company.
There are tax advantages to buying property in this way, particularly savings on stamp duty when the property is sold on.
The main tax advantage for companies buying and selling UK property through offshore firms is to avoid stamp duty land tax.
Buyers pay stamp duty when the property is bought, but when it is sold on through an offshore firm, it 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 12pc. It means the seller can get a higher price for it, tax expert Richard Murphy said.
Shares in the company are sold to the new buyer and the registered owner on the title deeds does not change, meaning stamp duty land tax is not payable. None of this is illegal.
The Government says it wants to clamp down on offshore tax havens and Mr Cameron said in May foreign companies would have to reveal the ultimate owners of the thousands of UK properties they owned.
HMRC also announced in August that those who do not come forward and pay outstanding taxes from offshore investments and accounts, would face tougher penalties.
But Mr Murphy said: “The government is all talk and no walk on this issue.”
£134m for Aviva’s home
The most high profile property to be sold offshore is Norwich’s grandest office block – Aviva’s headquarters on Surrey Street.
In 2010 Surrey House was bought for £134.3m, according to the Private Eye data, by a company registered in Jersey called Surrey Street Nominee 1 Ltd.
That company is registered to an office block on the Channel Island and was set up in December 2009, a few months before the biggest ever sale of
The latest documents registered in Jersey this year show the main shareholders of Surrey Street Nominee 1 are called Menorah Surrey Street and Harel Surrey Street.
Those two companies are registered at the same building as the firm which bought the company, Surrey Street Nominee 1.
In a report from Reuters at the time of the sale, Menorah and Harel refer to Israel insurance groups Menora Mivtachim Holdings and Harel Insurance Investments & Financial Services.
They each bought 48 percent of a partnership in Surrey Street Nominee to buy the office block.
Aviva sold Surrey House in 2004 so was not involved in this re-sale in 2010.
•TOMORROW: Find out how developers are buying up Norfolk land through offshore firms.
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