Private Eye on Lord Rothermere’s Ownership of London Property in Offshore Accounts

A few years ago, Private Eye ran a piece about how Lord Rothermere, the owner of the Daily Mail, was using his non-dom status to avoid paying British tax, despite the fact that he is very much resident in this country. I found this piece in Private Eye’s issue for 13th-20th December 2013 about how Rothermere was also using offshore accounts to avoid paying tax on prime pieces of real estate he’d purchased in London.

Lord Rothermere

A Capital Idea

“Offshore investors avoiding millions in tax spent £7 billion on London’s lavish properties in last year sending market prices soaring.” So screamed a Daily Mail headline a year ago. What the newspaper didn’t report was that a chunk of the “offshore” purchases of prime London property were accounted for by its very own proprietor, Lord Rothermere.

Home for Rothermere, his wife Claudia and their five children is Ferne House, a neo-Palladian mansion in 224 acres of grounds in Wiltshire. But the family also has a London house on Addison Road, Holland Park, a ten-minute walk up Kensington High Street from the Mail’s Derry Street headquarters. This is no pokey pied-a-terre either. property website Zoopla, part of Rothermere’s Daily Mail and General Trust plc group, values it at £21.75m.

The London house was bought in 2001. This was couple of years after the Rothermeres had bought Ferne Park and commissioned the mansion from architect Quinlan Terry – not by the Rothermeres themselves, but by a British Virgin Islands company called West Land Assets Ltd. for £9.5m with no mortgage required against the property.

A 2003 application for planning permission for changes to the property, including an extension for a swimming pool, made in the names “Lord and Lady Rothermere” indicates that this was an offshore vehicle for the Rothermeres. The following year, the house was sold again for £8.5m with the new owners now given on Land Registry documents as Lord and Lady Rothermere themselves, subject to charge, almost certainly relating to a loan, from private bankers Hoare & Co. A clause in the title document suggest the Rothermere’s did not become owners outright but as trustees of a trust. Such are the undemanding requirements of British property registration and the secrecy of trusts that its location and beneficiaries are secret.

The Rothermere’s affairs appear to be run largely by accountant David Nelson of Dixon Wilson, who replaced Lord Rothermere on title documents for the Addison Road house – and thus, it appears, as a trustee alongside Lady Rothermere – in September 2010.

More recently what is almost certainly the trust behind the property was (unusually) named when a footnote in a DMGT financial results announcement last month mentioned that in the previous year the company “disposed [sic] certain assets for consideration of £0.1 million to The Addison Road Settlement whose trustees are Lady Rothermere, wife of the company’s chairman and David Nelson, a non-executive director of the company”.

The beancounter Nelson thus has feet firmly in both the Rothermere family camp and the publicly traded DMGT, where he sits on the board’s remuneration, audit and investment committees. On his own firm Dixon Wilson’s website he boasts of “considerable experience and expertise in helping wealthy families, and their businesses, and landed estates concerning tax … with a particular emphasis on the UK aspects of international tax, offshore trusts and the UK resident who has retained a foreign domicile”. This explains his usefulness to Lord Rothermere who, despite being born and bred in Britain and permanently occupying some swathes of British soil, claims “domicile” in, er, France (exposed in the Eye four years ago).

This privileged tax position, under which offshore income is taxed only when remitted to the UK, along with the inheritance tax and stamp duty advantages, goes a long way to explain the trust and offshore companies. While complex Bermuda/BVI/Geneva channels for Rothermere’s income, revealed in Eye 1231 and 1351, transform it into offshore income, valuable property can allow money back in tax-free as loans secured against the bricks and mortar rather than as taxable income.

In January 2011, four months after Nelson appeared as trustee of the Addison Road settlement, a new lender appeared in offshore banker RBC Europe. It is reported in Land Registry records as being “under an obligation to make further advances” against the security of the £21m townhouse, which would facilitate such a scheme.

Rothermere’s other tax-efficient offshore property deals include the 2005 purchase of Ferne Park Cottage on the Wiltshire estate for £640,000 in the name of the same BVI company, Harmsworth Trust Co Ltd, that acts as trustee to the trusts holding Rothermere’s jersey investment vehicle, Rothermere Investments Ltd. Since October last year it has been subject to a charge in favour of Barclays Private Bank and Trust Co in Jersey which is also set to “make further advances”.

In December 2011 yet another trust run by Claudia Rothermere and David Nelson, “WM Trust”, bought The Garden House, also on the Ferne Park estate, for £3m, although documents suggest it entered the Rothermere property empire around the same time as Ferne Park Cottage a decade earlier. Ferne House and Ferne Park themselves, worth upwards of £50m, are registered in Lord and Lady Rothermere’s names but again this appears to be as trustees of a trust and “care of Dixon Wilson”, ie David Nelson. There is no mortgage against this property, but when in 2006 Rothermere added new east and west wings to Ferne House he did use £50m worth of DMGT shares held by his Bermuda vehicle Rothermere Continuation Ltd as security for a loan (without properly declaring the matter to the stock market).

Thus, with the help of an accountant who specialises in “offshore trusts and the UK resident who has retained a foreign domicile”, the proprietor of the newspaper that judges who does and doesn’t love Britain also enjoys one of its richest and most tax-avoiding property portfolios.

It’s probably worth adding here that the xenophobic Daily Mail probably shared UKIP’s belief that London housing is scarce because of all those immigrants from eastern Europe. The reality is that it’s scarce, because rich investors are pushing the prices beyond ordinary people’s ability to buy them. And this shows that Rothermere and his wife are two of them.

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3 Responses to “Private Eye on Lord Rothermere’s Ownership of London Property in Offshore Accounts”

  1. Michelle Says:

    A volunteer friend and I were discussing the new false living wage yesterday and he used a wonderful word for the political sloganeering about it – ‘duplicitous’. Duplicity seems to sum up the commentary in some of the media on a lot of important issues. 😦

    On London property it gets a lot worse:

    “Some 36,342 properties in London have been bought through hidden companies in offshore havens and while a majority of those will have been kept secret for legitimate privacy purposes, vast numbers are thought to have been bought anonymously to hide stolen money…

    London has become a global magnet for corrupt funds, TI [Transparency International] said, due to the high prices of property – enabling millions of pounds to be laundered at a time – and Britain’s notoriously lax rules on the disclosure of property ownership.” ref: http://www.independent.co.uk/news/uk/home-news/london-property-boom-built-on-dirty-money-10083527.html

    • beastrabban Says:

      Thanks for that – that’s really interesting. Going through some old copies of Private Eye, I found a piece on money laundering in the City. I wasn’t aware of this, but I really am not surprised. It seems our country is doing its level best to allow the world’s spivs and gangsters to launder and secrete their stolen billions over here.

  2. Michelle Says:

    Not sure if you have seen this as one of the makers is Bristol based, on The City of London this is a very interesting documentary:
    ‘Secret City – A film about the City of London, the Corporation that runs it.’ https://youtu.be/eHnwtkfX2k4

    And for more info about the makers: “Secret City, directed by Michael Chanan, Professor of Film and Video University of Roehampton Lecturer and written by Lee Salter, Senior Lecturer in Journalism at UWE Bristol, uncovers the hidden history of the institutions at the heart of the economic crisis.

    Secret City looks at the Corporation’s complex relations with Parliament, the Monarchy, the Church, Greater London and the global economy, through contributions from Londoners, including scholars, an MP, a businessman, Church people and activists.”
    REF: http://info.uwe.ac.uk/news/UWENews/news.aspx?id=2380

    And my take on The City:

    The Skyline’s Been Pierced

    How does the abstract drive us ever onward?
    The learned amongst us say the left hemisphere’s to blame
    while the right sits in silence, intuition has no game.
    But the poetry of honesty has no mention as yet,
    or how easily we learn to forget
    uncomfortable truths
    the unfettered market and City rules.

    Skyline’s been pierced by virtual wealth
    myths dealt and traded,
    on 24/7 feral stealth.
    On a foundation of negatives,
    voraciously dreamt,
    in the pursuit of pure profit
    over a chasm of debt,
    just a concept,
    with derivatives
    but it entraps most it’s met.

    Less than nothing,
    has a price,
    finance is a control
    the cuts hit people
    the stock market bell takes its toll,
    or is it collateral damage?

    Real lives, pawn brokered,
    we can no longer afford.
    Aid? Medicines, most for profit go abroad.
    Services, facilities, even books and their worth
    are shelved, for our cut-price,
    discounted, virtual world.

    The skyline’s been pierced,
    light could shine through,
    if we help one another and one another helps too.
    What makes us believe that’s so difficult to do?

    Has hope been imprisoned by imaginary wealth,
    so our souls know no empire
    except Babylonian dreams
    that persuade us to benefit the few.

    by Michelle Thomasson (Written November 2010)

    During some landscape studies way back in the late 80´s we were asked to think about a new design for Greenwich Park. I remember looking at the serene views towards the river Thames. Twenty years later from Greenwich park I looked towards the Thames again and all I could see were powerful modern buildings, an extension of London city´s cancerous financial sector, the skyline had been pierced by electronic illusions, imaginary wealth and greed which had destroyed the view; meanwhile how many real lives had been destroyed, our society´s ignorant betrayal of helpless people? We have a discounted virtual world.

    As most of our money system is driven by greed for profit and fuelled by imaginary electronic numbers why do we allow these imaginary concepts to control us?

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