WHO OWNS PRESTON?: Land worth hundreds of millions is in the hands of mystery offshore investors

A reader says she has been having problems with cyclists in Fishergate, see letter
A reader says she has been having problems with cyclists in Fishergate, see letter
  • Offshore companies have been buying up huge chunks of Preston over the last decade
  • At least 170 packages of land and buildings worth hundreds of millions of pounds have been snapped up
  • The most attractive target for overseas entrepreneurs has been Preston’s main shopping street Fishergate
Have your say

They could hardly be more different . . . the idyllic sun-kissed beaches of the British Virgin Islands and the rain-lashed streets of Preston city centre.

But the two share a gilt-edged secret, thanks to the shadowy “tax haven” status of the Caribbean paradise.

Nominal companies registered in the BVI own vast chunks of land in Lancashire’s administrative capital - much of it in the main shopping street of Fishergate.

Businesses based in places like the Channel Islands, Gibraltar, the Cayman Isles, Hong Kong, Panama and the Turks and Caicos Islands have also invested heavily in the city over the past decade.

At least 170 packages of land and buildings - some of them Preston landmarks - are listed amongst the assets acquired by offshore firms between 2005 and 2014, according to a recent investigation.

The ground which properties as grand as the iconic Miller Arcade, its next-door-neighbour Crystal House and even popular pubs like the Old Black Bull and Roper Hall in Friargate all stand on land that has been bought by companies with their headquarters overseas.

When it’s so easy to set up a company in places like the Virgin Islands to escape the British tax net, then why wouldn’t you?

And on the outskirts of the city Ashton and Lea Golf Club, Harris Park at Fulwood, the site of the Marriott Hotel in Broughton and a service station on the A6 are amongst those said to have been snapped up by owners whose offices are listed abroad.

But it isn’t just the multi-million pound properties which attract largely anonymous investors based thousands of miles away.

At least eight individual two-up-two-down terraced houses in Deepdale have been purchased by a company called Radiant Properties in Bermuda.

A two-bedroomed flat on New Hall Lane is in the portfolio of a business in the Virgin Islands.

And a neat studio apartment overlooking the city’s docklands is making profits for a firm in Guernsey.

Yet, while the tax haven status of dozens of nations around the world allows land and property owners here to avoid paying millions to the British Exchequer, it is all above board.

“I’d guess much of Preston city centre is owned like that,” said a Lancashire-based accountant. “When it’s so easy to set up a company in places like the Virgin Islands to escape the British tax net, then why wouldn’t you?”

The BVI, holiday home to Virgin boss Sir Richard Branson, is a major global player in the offshore financial services industry. And much of Preston’s prime real estate on bustling Fishergate has attracted serious interest from companies based there.

The islands offer total anonymity to businesses who register their headquarters in what they themselves prefer to call an “offshore financial centre.”

Discretion is assured, so investors, directors, agents and managers can all do business behind a dark cloak of secrecy. If required, nominee directors can be provided - some BVI locals lend their names to hundreds of companies.

Businesses do not have to publish accounts. And the annual licence fees that firms pay for that privacy, and its generous tax breaks, make up more than half of the nation’s economy.

Around two dozen BVI-registered firms are said to have bought 54 sites in and around Preston since 2005, with 14 of those on Fishergate alone, including some top High Street stores and finance houses.

They have also invested in at least three more in Church Street - one of them Miller Arcade - two in Orchard Street, plus Lothian House on Ringway and Trinity Annexe off Friargate.

Further afield BVI companies have scooped up parcels of land and buildings in Avenham and Fulwood, including the site of the former Harris Orphanage in Garstang Road, the Broughton Park estate, Park House where Judge William Openshaw was murdered, land and buildings on Watling Street Road, property in Navigation Way and land in Oliver’s Place, off Eastway.

Six firms in Guernsey have been listed as owning up to 30 pieces of land and property including more than a dozen homes on a residential development behind Asda in Fulwood, land in Friargate and Fishergate and the docklands site where the DFS furniture store stands.

Seven Jersey-based companies have interests in Crystal House and properties on Preston Technical Park in Marsh Lane, Blackpool Road, in Ingol and in Lightfoot Lane, Fulwood.

Land at Ashton and Lea Golf Course was bought in October 2012 for £4m by Bulwark Limited of Gibraltar, as were four separate parcels of land in Walton-le-Dale acquired for £16m on the same day. Bulwark is listed as having one director, an engineer with a correspondence address in a modest cul-de-sac in Waterlooville, Hampshire.

Yet not all overseas companies with interests in the Preston area are enjoying tax haven status, according to the investigation by Private Eye magazine.

The Bank of Ireland bought a house in The Drive, Fulwood for £325,000 in January 2008, and a red-bricked semi-detached in Primrose Road, Deepdale for £88,000 a year later.

The site of the Ibis Hotel at Broughton was bought by Danish estates company K/S Fulwood in 2005 for more than £5m. A country house in Whittingham Lane, Goosnargh was snapped up by an investment firm in Belgium in 2010.

The Old Black Bull pub in Friargate was purchased by a holding company in Holland last year for £1.7m and Faroe Islands company P/F Rainbow Seafood acquired a unit at Riversway Business Village in the city’s dock estate.

While the avoidance of tax by companies registered abroad can mean a significant loss to the British Exchequer, it does not have any direct financial bearing on the local economy, says the Lancashire’s “Chancellor” Coun David Borrow.

But the deputy leader at County Hall revealed he was surprised by the scale of overseas interests in Preston.

“I knew it was a significant factor in central London with a lot of properties both residential and commercial being owned by companies registered abroad,” he said. “But I wasn’t aware it was a 
significant issue here in Preston.

“I don’t think it is anything to be concerned about as long as there is no illegality being hidden.

“Certainly where councils are concerned, if we are owed money and we don’t know exactly who owns a property then we can put a charge on that so that when it is eventually sold we get our money.

“Being a British Overseas Territory the UK could enforce stricter regulations on companies in the BVI if we wished to do so. But that is a matter for the Government.”

Councillor John Swindells, Deputy Leader of Preston City Council, said: “Obviously we would want and expect all companies to act within the law and the spirit of the law, to pay their taxes here in the UK.

Also, it’s important that property owners actually invest, look after and use their properties to support wider re-generation efforts in the City Centre.

“It’s no good having the property if you are not going to do anything with it and that’s a danger of property investment – especially from off-shore companies who may not have the best interests of the city at heart.”