Andy Wightman: Duke of Buccleuch's offshore tax haven

Fri Aug 12 14:16:56 BST 2016

Revealed: The Duke of Buccleuch and the offshore haven
http://www.thenational.scot/news/revealed-the-duke-of-buccleuch-and-the-offshore-haven.15073

Revealed: The Duke of Buccleuch and the offshore haven
 MARCH 15TH, 2016 - 12:37 AM
 MICHAEL GRAY
 15 COMMENTS
THE Buccleuch family, owners of more than 240,000 acres of private land, use a shadowy Cayman Islands firm to control and sell land, it has emerged.

The aristocratic estate run by Richard Scott, the 10th Duke of Buccleuch, confirmed that an offshore ownership group, Pentland Limited, acts as an offshore contact to the family’s vast land business empire.

The use of the Cayman Islands tax haven, revealed following research by land reform campaigner Andy

Wightman, has reignited calls for greater action on the use of complex legal mechanisms to obscure the
 ownership of Scotland’s land.

Scott, inheritor of the Buccleuch dynasty of 1663, is a director of Pentland, which has a variety of shared financial transactions with firms within the Buccleuch group, where Scott is also a director.

Buccleuch lawyers Anderson Strathern confirmed to the Registers of Scotland that one such transaction was the ownership then sale of half a stake in Smeaton Farm (part of Dalkeith Country Park) from Pentland to Buccleuch Estate.

Pentland also owns land near Canonbie, in Dumfries and Galloway, and signed loans worth millions of pounds in total to various Buccleuch subsidiary companies.

Wightman, who compiled the research, said: “Transparency is one of the key issues for a world of global capital in which the wealthiest one per cent are not only getting wealthier but are able to conceal their affairs through the use of secrecy jurisdictions.

“Since working on the
 Sunday Times Rich List 20 years ago and since the advent of the Scottish Parliament in 1999, the UK and Scottish Governments are only now beginning to appreciate the potential scale and impact of secrecy in how land and property is owned.

“What I and others have been campaigning for over the past 20 years is quite simple – full, transparent and accessible information on who really owns Scotland. What we have uncovered today is probably just the tip of the iceberg and it will be a key challenge for the next Scottish Parliament to ensure complete transparency on these matters and ensure that there are no longer any secrets about who owns Scotland.”

A spokesman for the Duke’s estate confirmed Pentland Limited was a Buccleuch venture with interests in Scottish land. “Pentland Limited is a Cayman Islands incorporated vehicle which is wholly owned by The Buccleuch Estates Limited which is UK registered," he said. "The company
 has always been wholly owned by Buccleuch and members of the Buccleuch family, all of whom are UK resident taxpayers. All profits arising in Pentland Limited are subject to UK corporation tax.

"Pentland Limited has historically owned land in the UK and currently owns an area of land near Canonbie in Dumfries and Galloway.”

The Duke, whose five estates cover an acreage larger than any other landowner in the UK, has been a consistent opponent of land reform and has been implicated in numerous community disputes in recent years.

Last week the inherited estate announced plans to block access to Dalkeith Country Park at night unless walkers and cyclists paid for access. Buccleuch also faced a community backlash in Canonbie over plans for coal bed methane extraction.

Buccleuch, one of the old aristocratic families that grew to dominate rural Scotland through historic land grabs, said he was “deeply dismayed”
 that the land reform debate had been “re-opened” in the past few years.

Rob Gibson MSP, convener of the Rural Affairs, Climate Change and Environment (RACCE) committee that led scrutiny of the Land Reform Bill, said the new evidence demonstrated the need to use the Land Reform Bill to ensure future ownership transparency.

“This adds to the fact that what the government is proposing is going to expose this kind of thing," he said. "What for? You need to know who owns land to hold them to account and to tax them. That’s why completing the land register is vital."

Yesterday the RACCE committee published its legacy report for 2011-16, which signalled land reform efforts would continue through establishing a Land Commission.

Gibson added that “the next committee will have a big job to do” to ensure that land ownership is transparent and any ongoing tax avoidance is identified.

The scale of
 offshore ownership of land is estimated to equal 750,000 acres. As the national land register is incomplete, Scottish Government officials have been unable to confirm the scale of the tax haven problem.

In January chief police investigators warned complex offshore ownership structures also created a bureaucratic nightmare for enforcing the law, specifically in relation to prosecuting the wildlife crime that took place on the Kildrummy estate. The police found it impossible to identify a legal owner of the land – held offshore in Jersey – despite three years of effort and “significant international investigations”.

Nine months of negotiation between MSPs, campaigners and the government aimed to strengthen the Bill to ensure the greatest transparency for Scottish land registered in places like Cayman, the British Virgin Isles and Jersey. On Wednesday the Scottish Parliament will hear amendments to the bill from Patrick Harvie
 MSP, including proposals to tighten regulation on land owned in British overseas territories.

Nicky MacCrimmon, who led land reform campaigners to victory at the 2015 SNP conference, called for the government to end tax haven ownership by rich landowners. He said: “It is not just a question of tax revenue or potential money laundering. It goes to the heart of democracy by saying we demand transparency and accountability from the people who own and exploit our natural resources.

“The [land reform] movement seems to be getting stronger all the time both within political parties and outwith them. It is becoming mainstream to believe in land reform; ordinary people are having conversations in pubs and online forums about land value tax. The next big leap for me to take the debate forward will be to really begin to highlight the problems caused by our land use and ownership in urban settings.”

The greatest opposition to
 land reform has come from the lobbyists for big landowners and their legal representatives. Legal firm Brodies warned the Scottish Government that land reform action could lead to a court challenge and high compensation claims from landowners.

Socialist coalition Rise has called for Scotland’s aristocracy to be confronted through “a campaign of protest”.

The ownership of land in Scotland has also caught the attention of tax justice campaigners, who oppose the web of “secrecy jurisdictions” where an estimated $7.6 billion of global wealth is stored offshore.

Alex Cobham, director of research with the Tax Justice Network, said: “There’s no good reason not to know who you’re doing business with, so any time you come across such complex and opaque ownership arrangements, you have to ask what the reason is. The irony here is that it relates to the ownership of the most tangible assets imaginable: the land
 itself of this country.

“The UK Government has played an important role in the fight against anonymous company ownership, but there’s a very long way to go – and it starts with addressing the biggest global financial secrecy network, which is of course made up of the UK’s own Overseas Territories and Crown Dependencies. When David Cameron hosts his international anti-corruption summit in May, the item at the top of the agenda must be to require every one of these jurisdictions to commit to public registries of the beneficial ownership of companies, trusts and foundations.

“The Scottish Government, meanwhile, can take its own steps to ensure that no land is owned without public record of the ultimate beneficial ownership – regardless of which jurisdiction or structure is used.”

The Cayman Islands, where Buccleuch’s Pentland Limited firm is based, were condemned by President Barack Obama for undermining
 global tax rules.

Cayman, a British Overseas Territory, has no direct taxation and is used by many of the world’s largest corporations to avoid tax. One Cayman building, Ugland house, is the registered address of nearly 20,000 global firms.

When asked who could shut down the tax avoidance industry on the island, Cayman premier Alden McLaughlin said: “Ultimately the UK can, because they have the overriding responsibility.”

Further controversy over business activity in tax havens coincides with the release of a new report from charity Oxfam titled Ending the Era of Tax Havens.

Mark Goldring, Oxfam chief executive, said: “It’s time the government ended the secrecy that allows tax dodgers to get away without paying their fair share, robbing the UK – and poor countries – of vital revenue that could help fund public services and provide a strong safety net for the most vulnerable.”

This
 report is in collaboration with Common Space: visit CommonSpace.scot

Andy Wightman: On the trail of Pentland Ltd

The National View: Transparency about ownership is vital to our land reform

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