Buildings in Bedford Square used by the Ministry of Justice to hold tax tribunals belong to a company registered in a tax haven, says Private Eye. The discovery by the Eye means the UK government is going against its own rules which forbids it from transferring its assets offshore. In this case it is paying a landlord that is registered in Gibraltar.

Front of Georgian buildings.
The freehold of 43-45 Bedford Square is owned by a company registered in a tax haven. The Ministry of Justice uses it to hold tax tribunals.

“Since 2007 the freehold of 43-45 Bedford Square — where many a convoluted offshore tax avoidance scheme has been chewed over by m’learned friends — has been held by a company called Raxele Ltd in the tax haven. Valued at the time at £18m, Raxele funded the purchase entirely with a loan from another Gibraltarian company called Fillimore Ltd.

“This is a well known technique to ensure that taxable rents — in this case on a lease taken out some years earlier by the British government — are reduced or eliminated by interest payments. The lease to the government ends this March and it will be interesting then to see if the government signs up to sending more money offshore.

“As to who benefits from the arrangement, tax haven secrecy means it’s impossible to tell. Raxele Ltd is legally owned by a trust company called Kustgatan Fiduciary Ltd, but there the trail runs cold and the ultimate beneficial owner is concealed,” reports the Eye.

A quick check of Camden Council’s planning database reveals another anomaly. Until last year the legal planning use of the Grade I listed buildings was somewhat uncertain. An application was made in November 2014 for a certificate of lawfulness to use the property as a law court. Camden granted the application saying it had no reason to doubt the applicant who had provided evidence it had been used as a law court for more than 10 years.