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| Offshore companies and the boom in villas on Phuket | Offshore companies and the boom in villas on Phuket |
| (4 months later) | |
| One of the side-effects of Britain's financial bubble was a temporary boom in sales of luxury villas on the island of Phuket in Thailand. | One of the side-effects of Britain's financial bubble was a temporary boom in sales of luxury villas on the island of Phuket in Thailand. |
| These exotic hideaways had infinity pools, their own gyms and waiting speedboats. They could be rented out for cash when not in use by their owners, and cost anything up to £5m to buy. | These exotic hideaways had infinity pools, their own gyms and waiting speedboats. They could be rented out for cash when not in use by their owners, and cost anything up to £5m to buy. |
| Britons commonly bought them through anonymous British Virgin Islands (BVI) offshore companies. | Britons commonly bought them through anonymous British Virgin Islands (BVI) offshore companies. |
| A Bangkok law firm, Limcharoen Hughes and Glanville, employed a couple of expatriate British solicitors and were active with UK clients. When approached by the Guardian, the lawyers denied involvement. Their deputy chief executive officer, Desmond Hughes, said: "Let me categorically correct your assertion that our law firm 'sets up' BVI companies. We do not 'set up' BVI companies." He called this a "fundamental error". | A Bangkok law firm, Limcharoen Hughes and Glanville, employed a couple of expatriate British solicitors and were active with UK clients. When approached by the Guardian, the lawyers denied involvement. Their deputy chief executive officer, Desmond Hughes, said: "Let me categorically correct your assertion that our law firm 'sets up' BVI companies. We do not 'set up' BVI companies." He called this a "fundamental error". |
| But his denial turned out to be more a matter of semantics. Records show the law firm in fact commissioned a specialist incorporation agency in the BVI on their British clients' behalf, to do the detailed work of setting up a series of such offshore companies. | But his denial turned out to be more a matter of semantics. Records show the law firm in fact commissioned a specialist incorporation agency in the BVI on their British clients' behalf, to do the detailed work of setting up a series of such offshore companies. |
| One of the Britons who buys and develops villas, the former tennis player David Lloyd, pictured right, was willing to explain. | One of the Britons who buys and develops villas, the former tennis player David Lloyd, pictured right, was willing to explain. |
| Lloyd, who set up a profitable chain of UK gyms when he retired from sport, says the reason for his two BVI entities, Rise Bright Development and High Joy Group, was not tax avoidance. It was to circumvent Thai laws on land ownership. | Lloyd, who set up a profitable chain of UK gyms when he retired from sport, says the reason for his two BVI entities, Rise Bright Development and High Joy Group, was not tax avoidance. It was to circumvent Thai laws on land ownership. |
| "It's purely because in Thailand, you can't own the land if you're a foreigner. What you have to do is form a company to buy the land in which a Thai partner owns 51%. That company then gives a lease of the property to a BVI company which you do own. There are no tax advantages: it is purely because of the restrictions on land ownership". | "It's purely because in Thailand, you can't own the land if you're a foreigner. What you have to do is form a company to buy the land in which a Thai partner owns 51%. That company then gives a lease of the property to a BVI company which you do own. There are no tax advantages: it is purely because of the restrictions on land ownership". |
| One buyer, Chris Sharp, a retired London shop-owner, told us he had been advised that his BVI company would also allow him to avoid Thai capital gains tax, if he sold the Phuket villa on. | One buyer, Chris Sharp, a retired London shop-owner, told us he had been advised that his BVI company would also allow him to avoid Thai capital gains tax, if he sold the Phuket villa on. |
| Another Thai villa owner is Ian Brimecome, the chairman of the Equitable Life insurance company. He and his wife, Charlotte, used an entity called Fortune Green Holdings in the BVI to buy a holiday home after visiting Phuket in 2007. | Another Thai villa owner is Ian Brimecome, the chairman of the Equitable Life insurance company. He and his wife, Charlotte, used an entity called Fortune Green Holdings in the BVI to buy a holiday home after visiting Phuket in 2007. |
| He told us that another reason why local estate agents and lawyers used offshore companies was to avoid Thai legal problems on inheritance. | He told us that another reason why local estate agents and lawyers used offshore companies was to avoid Thai legal problems on inheritance. |
| "Instead of having to change ownership of the property, you can simply transfer the shares in the existing company to the person who inherits." | "Instead of having to change ownership of the property, you can simply transfer the shares in the existing company to the person who inherits." |
| The British tax authorities depend on offshore villa owners volunteering the existence of their overseas assets and income. | The British tax authorities depend on offshore villa owners volunteering the existence of their overseas assets and income. |
| Brimecome said HMRC had mounted a detailed investigation in 2010 of such Thai villa purchases, and had given him a clean bill of health. | Brimecome said HMRC had mounted a detailed investigation in 2010 of such Thai villa purchases, and had given him a clean bill of health. |
| The Guardian/ICIJ Offshore Register: Thailand | The Guardian/ICIJ Offshore Register: Thailand |
| Ian & Charlotte Brimecome Company: Fortune Green Holdings Chairman of Equitable Life who used offshore entity to buy Phuket villa. Brimecome, who has a £2m home in Pirbright, Surrey, joined the boards of Equitable Life and Axa in 2007. The same year the Brimecomes visited Phuket, the Thai beach resort, to buy a villa. The BVI company to own it was set up through a local law firm. Intermediary: Limcharoen Hughes & Glanville, Bangkok. Brimecome: "The local estate agents and lawyers arrange the sales this way. They say it is less cumbersome than using an on-shore company, and avoids the problems in Thailand of changing the property ownership to your heirs if you die. The shares in the company can simply be transferred instead." | Ian & Charlotte Brimecome Company: Fortune Green Holdings Chairman of Equitable Life who used offshore entity to buy Phuket villa. Brimecome, who has a £2m home in Pirbright, Surrey, joined the boards of Equitable Life and Axa in 2007. The same year the Brimecomes visited Phuket, the Thai beach resort, to buy a villa. The BVI company to own it was set up through a local law firm. Intermediary: Limcharoen Hughes & Glanville, Bangkok. Brimecome: "The local estate agents and lawyers arrange the sales this way. They say it is less cumbersome than using an on-shore company, and avoids the problems in Thailand of changing the property ownership to your heirs if you die. The shares in the company can simply be transferred instead." |
| David Lloyd Company: Rise Bright Development; High Joy Group; David Lloyd Asia Co. Tennis star turned property developer in Thailand. Lloyd was Davis Cup captain and formerly coached Tim Henman. He built up a chain of gyms in the UK, sold them and became a resort developer on Phuket in Thailand. He is developing luxury villas at Cape Sawan, to sell between £2m-£5m and set up BVI ownership entities in 2007-8. Intermediary: Limcharoen, Hughes & Glanville, Bangkok. Comment: "It's purely because in Thailand, you can't own the land if you're a foreigner. What you have to do is form a company to buy the land in which a Thai partner owns 51%. That company then gives a lease to a BVI company which you do own. There are no tax advantages: it is purely because of the restrictions on land ownership." | David Lloyd Company: Rise Bright Development; High Joy Group; David Lloyd Asia Co. Tennis star turned property developer in Thailand. Lloyd was Davis Cup captain and formerly coached Tim Henman. He built up a chain of gyms in the UK, sold them and became a resort developer on Phuket in Thailand. He is developing luxury villas at Cape Sawan, to sell between £2m-£5m and set up BVI ownership entities in 2007-8. Intermediary: Limcharoen, Hughes & Glanville, Bangkok. Comment: "It's purely because in Thailand, you can't own the land if you're a foreigner. What you have to do is form a company to buy the land in which a Thai partner owns 51%. That company then gives a lease to a BVI company which you do own. There are no tax advantages: it is purely because of the restrictions on land ownership." |
| Chris Sharp Company: Charm Nice Group Retired London shop-owner who bought villa on Phuket. Sharp listed as retired. Company incorporated 1.11.2007.UK flat in Barnet, Hertfordshire, EN5 4NG, sold for £292,000 in 2009. Intermediary: Limcharoen, Hughes & Glanville. Comment: "I retired from running a greeting card shop. I met a lady here. The lawyers advised me to have a BVI company because otherwise, they said, when you sell, the Thais take a lot of tax off you." | Chris Sharp Company: Charm Nice Group Retired London shop-owner who bought villa on Phuket. Sharp listed as retired. Company incorporated 1.11.2007.UK flat in Barnet, Hertfordshire, EN5 4NG, sold for £292,000 in 2009. Intermediary: Limcharoen, Hughes & Glanville. Comment: "I retired from running a greeting card shop. I met a lady here. The lawyers advised me to have a BVI company because otherwise, they said, when you sell, the Thais take a lot of tax off you." |
| Gerry Matthews Company: Kinetic Country Group Retired clothing wholesaler who bought villa on Phuket. BVI company was incorporated in July 2005, to buy a villa at the Cape Yamu development in Phuket, with pools and gyms, developed by Irishman Peter Hamilton. At retirement from his clothing wholesale firm, Smith & Brooks, Matthews owned £3m house in Buckinghamshire. Intermediary: Campbell Kane, Phuket developers. Comment: no response to approach. | Gerry Matthews Company: Kinetic Country Group Retired clothing wholesaler who bought villa on Phuket. BVI company was incorporated in July 2005, to buy a villa at the Cape Yamu development in Phuket, with pools and gyms, developed by Irishman Peter Hamilton. At retirement from his clothing wholesale firm, Smith & Brooks, Matthews owned £3m house in Buckinghamshire. Intermediary: Campbell Kane, Phuket developers. Comment: no response to approach. |
| Michael Macareavey Company: Add Merit Group Macareaveyof Aberdeen AB11 7SQ, bought offshore company in 2007, while in Malaysia. Formerly director of MTM Process Engineering Ltd in UK. Intermediary: Limcharoen, Hughes & Glanville. Comment: no response to email. | Michael Macareavey Company: Add Merit Group Macareaveyof Aberdeen AB11 7SQ, bought offshore company in 2007, while in Malaysia. Formerly director of MTM Process Engineering Ltd in UK. Intermediary: Limcharoen, Hughes & Glanville. Comment: no response to email. |
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