A BMW spokesman at the company’s headquarters in Munich said Land Rover’s assets has been transferred to a Jersey-registered company. The move will mean the group avoids stamp duty on the sale of Land Rover to Ford.
BMW signed a memorandum of understanding with Ford over the sale when it agreed to sell Rover to venture capitalists Alchemy is liable for a 4% charge on the predicted £1.8bn sale.
But by creating a new Channel Island company BMW can legally avoid paying the liability.
Michael Quinlan, head of stamp duty at PricewaterhouseCoopers, said: ‘Provided you do that before a sale it is possible to get stamp duty group relief on a sale.’
The transaction is believed to have taken place two weeks ago.
To avoid the liability, BMW will have to prove asset transfer occurred before sale arrangements were in place. The Inland Revenue could force a showdown if officials can prove the Ford memorandum was a sale arrangement.
‘It is not any kind of last minute attempt to avoid stamp duty. It is strategic tax planning and is open to all corporates,’ Quinlan added.
The legitimate tax dodge comes just a month after chancellor Gordon Brown chose in his Budget to leave stamp duty loopholes open – despite mounting calls that billions of pounds of tax revenue is lost each year as companies shed subsidiaries and carry out routine tax avoidance.
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