Warwickshire Tory MP used firm in tax haven to buy his £1m home
Millionaire MP Nadhim Zahawi used a company in an offshore tax haven to buy his constituency home in Warwickshire.
Conservative MP Mr Zahawi – an adviser to David Cameron – used the company in low-tax Gibraltar as a lender to buy an estate and riding stables now worth £1 million in Upper Tysoe, near Stratford-upon-Avon, in 2011.
Berkford Investments Limited were traced to a PO box in the British overseas territory off Spain and to a residential address in Putney, south London.
Documents obtained from Companies House in Gibraltar show Berkford Investments Limited is managed by T&T Management Services Limited, which shares the same address.
T&T Management Services Limited’s website advertises its services as administering trusts for wealthy individuals and families to manage their assets, and avoid or minimise paying property taxes.
The company’s website specifically mentions avoiding inheritance tax when property is passed on to the next generation after death, and capital gains tax when a property is sold.
Assets held in offshore companies have escaped the UK tax net, and companies based in Gibraltar benefit from its low business taxes.
Using offshore companies is commonplace and not unlawful. There is no suggestion that Mr Zahawi or his wife avoided any taxes by financing their purchase with a mortgage from the Gibraltar-based company.
Earlier this month, it was revealed that Mr Zahawi’s MP expense claims for his Upper Tysoe 31-acre ‘second home’ estate included energy bills of £5,800 in 2012/13, including for his riding school business.
MPs’ expenses can only be claimed “wholly, exclusively and necessarily” in performing Parliamentary duties.
Mr Zahawi initially denied wrongdoing, but later admitted a “mistake” in claiming for the riding school, and pledged to pay back any claim made in error.
“While a meter was installed in the stable yard I have only been receiving one bill and had not deducted usage on that meter from my claims,” he explained.
Mr Zahawi and his wife Lana used the Gibraltar company when the couple became the “registered owners” for Oaklands stables in May 2011, a year after the London-based wealthy businessman became MP for Stratford.
The couple bought the property for £875,000, and Berkford Investments Limited is registered as the “lender” for the purchase. Documents state a charge as security against the property is owned by the lender “Berkford Investments Limited (incorporated in Gibraltar)”.
Two addresses are given for the company – a residential property in Putney, London SW15, and 28 Irish Town, PO Box 15, Gibraltar. Company records trace Berkford Investments Limited back to 2006.
Gibraltar promotes itself as a low-tax location for finance and business. It features heavily in websites advising the wealthy on how to minimise taxes by setting up a company there.
Despite Gibraltar’s long-standing reputation as a tax haven, it is not among the Organisation for Economic Co-operation and Development’s list of “uncooperative tax havens” – set up to help stamp out tax evasion and improve transparency.
Mr Zahawi was asked whether he considered it politically unwise to have any arrangement with Berkford and T&T Management Services Ltd, given the latter advertises its services in setting up and administering trusts to help the wealthy minimise or avoid property taxes.
Mr Zahawi responded: “I did pay stamp duty on my property in Tysoe and have always paid stamp duty on my property purchases.
“I fully support the 2012 budget and all budgets of this government. I purchased my property in Tysoe with a mortgage from a Gibraltar company.
"This fact and the details involved are fully declared on the Land Registry and to suggest it is in any way hidden would be factually incorrect.
“Equally, to suggest that in any way I am using offshore to reduce my tax burden is entirely incorrect.”
