Land Registry data reveals the scale of real state foreign investment in Manchester
Foreign-registered companies have bought properties in the Greater Manchester region worth £1.54 billion, a figure which could be much higher. Out of them, the chunk belongs to the sale of the CIS Tower in central Manchester that was sold for £66 million by the Jersey-registered Devonshire (CIS Tower) Limited. Similarly, other properties that were bought by offshore buyers include the warehouses on Fourmarts road in Wigan that were bought by the California, USA-registered Bankers Commercial for £40,502,996. Another property, 1 Auburn Street which houses the Hilton’s DoubleTree Hotel was purchased for a sum of £38,076,039 by BPH Acquisition 1 Manchester Limited which is registered in the Cayman Islands.
Although, all of Greater Manchester saw big investments, it was the city of Manchester which took the lion’s share. Some of these properties include a unit in the Electric Park industrial estate in Trafford that was bought by OXW Trafford S.A.R.L. for £30,150,000. Altrincham Priory Hospital was bought by Kleinwort Benson (Guernsey) Limited which is registered in Guernsey, for a sum of £29,375,000.
All these purchases show high level of foreign investment in the Greater Manchester region. There is an increasing interest in properties located in the region among buyers located abroad. However, there are some legal loopholes regarding the ownership of local properties by foreign buyers. While UK citizens have to pay corporation tax when they sell their commercial property, the same is not applicable on overseas owners of properties. Closing this legal loophole will mean a sum between £5bn and £8bn raised in the form of tax in a year.
Among all the commercial properties in the UK, one-third are owned by overseas companies. While there is no suggestion that the offshore companies are into any wrongdoing, one common factor to be noted is that all these companies are based in tax havens.
Now, there is a campaign by Stella Creasy, the Labour and Co-operative MP for Walthamstow to close the legal loophole. She termed the present legal conditions unfair and said that it is not fair that when British businesses sell commercial properties they pay tax on the gains they have made, but overseas companies don’t. The MP said that this legal loophole is costing British taxpayers billions of pounds as the foreign buyers pocket massive tax-free profits. She added that the sum thus raised will be enough to fund a pay rise for the public sector workers or tackle the waiting lists in the NHS. She said that the same is not true for other countries which tax profits, but it is no so for the government which refused a recent amendment to the Finance Bill, terming it complicated. The MP was in no mood to let the foreign buyers get away with such massive profits and demanded a level playing field for British businesses and the country’s public services.
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