Land Securities loses $91m battle over British tax bill
LONDON, March 27
LONDON, March 27 (Reuters) - Britain's largest listed property company Land Securities has lost a legal battle over a 60 million pound ($91 million) tax bill.
Britain's tax office brought the case as public spending cuts fuel public anger and legislative scrutiny in countries around the world over tax avoidance by companies such as Starbucks and Amazon.
Land Securities, a FTSE 100 developer, sold shares in one of its group companies to a Cayman Island subsidiary of Morgan Stanley, which put money into the company. Land Securities bought back the shares at a higher price and claimed a loss that could be deducted against tax.
Describing the scheme as "flagrant tax avoidance", HM Revenue and Customs Director General for Business Tax, Jim Harra, said the ruling sends "a clear message that indulging in tax avoidance is now a very high risk and expensive strategy, because HMRC will continue to challenge avoidance at every turn."
Land Securities said it was disappointed by the decision and that it had already paid the disputed bill.
"Land Securities has never sought to avoid paying tax that it owes," it said in a statement. "The recent tribunal decision relates to an historic issue going back over 10 years, linked to the raising of debt finance by Land Securities companies which were all UK tax resident."
Morgan Stanley declined to comment.