The property tycoons Christian and Nick Candy bought and sold a plot of land worth £27m through offshore companies that may have allowed them to pay almost no UK tax on the deal, the Guardian can reveal. The Guernsey-based CPC Group, which was set up by Christian Candy, bought the Parkwood estate and received planning permission to build a “stunning Palladian-style home” before selling it for £27m in 2012. At the time, stamp duty did not apply to properties if they were held through offshore companies and the offshore-registered company would not have had to pay capital gains tax on the deal. The complicated tax arrangements set up by the Candy brothers are set out in the huge leak of documents from the Mossack Fonseca law firm in Panama. Though the arrangements were legal, the disclosure is likely to fuel calls for more transparency over who owns property in the UK, a key demand for campaigners at the anti-corruption summit in London hosted by David Cameron. Nick and Christian Candy have developed a series of high-profile developments, including the luxurious One Hyde Park building in central London. Nick, the elder brother, is married to the former popstar Holly Valance. Christian is based overseas and named his twins Isabella Monaco and Cayman Charles. The transfer of the Parkwood estate, which neighbours Windsor Great Park, began in 2006 when a British Virgin Islands company called Bobstay Developments Limited paid £18.6m for the land. A year later, one of the Candys’ property vehicles – the Guernsey-registered CPC No 16 Ltd – bought Bobstay’s entire shareholding. At the time in 2007 the stamp duty rate for property worth more than £500,000 was 4%, so the tax bill would have been about £750,000 if the land had not been “enveloped” by the BVI company. Instead of buying the land, CPC bought the shares of the company owning the land and therefore did not have to pay stamp duty. In an email sent in May 2008, the company’s administrators noted: “It is not uncommon for CPC Group to acquire the property holding company when the group purchases a property.” Bobstay was “ultimately … owned by CPC Group Limited [via two CPC Group subsidiary companies]”. CPC Group immediately loaded Bobstay with debt, borrowing £16.25m from Anglo Irish Bank in March 2007. Anglo Irish was one of the banks worst affected by the economic downturn and was nationalised in 2009. In April 2008, Bobstay changed its lender, borrowing £17.8m from Royal Bank of Scotland. RBS was in effect nationalised six months later. In 2007, planning permission was granted to demolish the house on the site and replace it with a “stunning Palladian-style home in an exclusive English country setting”. The permission was renewed in 2011. The house would extend to 21,000 sq ft, with 10 bedrooms. The master suite alone included his and hers bathrooms, a dressing room, a sitting room and a safe room. In 2012, the CPC Group planned to sell Bobstay to the Airlangga Trust, which was registered in Guernsey. The contract for sale sets out the company’s tax situation with care, pointing out that since its purchase, “the company would be deemed to be resident for tax purposes in Guernsey and nowhere else and will be so resident for completion. No event has taken place and there are no circumstances whereby the company could become resident anywhere other than Guernsey for tax purposes.” It added that no activity had taken place that could result in the company being liable for corporation tax either. The sale was almost delayed because of a dispute over a $60 invoice from Mossack Fonseca. This precipitated a furious email from the company’s new administrators. “Again, I would like to reiterate that invoice 1967971 was only received today and therefore due to this and the fact that it is only for $60, this should NOT hold up completion of a £27m transaction,” ran the email. According to documents seen by the Guardian, the completion date was set for February 2012. In the March 2012 budget, George Osborne announced significant changes to the tax treatment of UK property “enveloped” by offshore companies. There would be 15% stamp duty for properties valued over £2m purchased in a “corporate envelope” and capital gains tax on property held in overseas envelopes. A spokesman for the Candy brothers said: “It is a matter of public record that Christian Candy established the Guernsey-based company CPC Group Limited in 2004. The acquisition you refer to was therefore subject to the Guernsey tax regime and all appropriate taxes have been paid.”
The tax arrangements of property tycoons the Candy brothers, developers of One Hyde Park and owners of Guernsey-based CPC Group, have been exposed in the Panama Papers. The Guardian newspaper has revealed that the brothers purchased and sold land worth £27m via offshore companies in moves that may have enabled them to avoid almost all UK tax on the transactions. Although the tax arrangements were not illegal, they may lead to further demands for greater transparency over UK property ownership. A spokesman for the Treasury said: “The government is clear about its commitment to tackling avoidance by multinational corporations – we are working with our international partners to ensure there is a level playing field across the world