Anger as new billionaire brothers who bought Asda for £ 7billion head to Jersey tax haven
The billionaire brothers who bought Asda for £ 7billion last night faced questions over their decision to transfer ownership of the UK supermarket to a controversial tax haven.
As part of the deal made by Mohsin and Zuber Issa, who were named CBE in the Queen’s Birthday Honors List, the grocer will be legally controlled by a Jersey-based parent company.
Experts said yesterday that there were several advantages to operating from Crown dependency, which imposes a zero corporate tax rate.
Mohsin, left, and Zuber, right, Issa, billionaire brothers behind a £ 7 billion bid for Asda, will transfer ownership of the UK supermarket to Jersey
It would also mean that the parent company does not have to disclose its accounts publicly and that the Issas would not pay any capital gains tax if they decided to sell Asda at any time.
But the move could prove to be controversial after Jersey was accused of being “among the worst” tax havens in the world.
The jurisdiction was ranked seventh in the world in a list of the most “aggressive” havens in a Tax Justice Network report last year, behind the Cayman Islands, the British Virgin Islands and Bermuda.
Haven: The Issa brothers’ stake in their oil forecourt business, EG Group, is already owned by a Jersey-based company
Labor MP Margaret Hodge, former chair of Parliament’s Public Accounts Committee, said yesterday: ‘Why on earth would Asda’s parent company choose not to be incorporated in the UK?
“The answer must be that there is a lax regulatory approach in Jersey that at best facilitates tax evasion.
“Having your business based in what is a UK tax haven just means that no one can trust that you are paying a fair amount of tax on the profits you make from doing business in the UK. “
Issas’ stake in the oil parvis company EG Group is held through a company based in Jersey.
George Turner, Director of Tax Watch UK, said that one of the main advantages of this structure is that a company can acquire assets by borrowing large sums of money and then sell those assets at a higher price to the future, but pay no capital gains tax. If that is their intention, then this is a looping hole that HM Revenue & Customs really needs to close.
A spokesperson for the brothers insisted that Asda “will remain a UK tax resident and pay all taxes due.”