The leaked ‘Pandora papers’ have exposed the London property market’s major role in hiding the wealth of the rich and powerful.
The papers implicate a number of current and former world leaders for parking cash in UK property, leading to claims that London is the tax avoidance capital of the world.
The family of controversial Azerbaijan ruler Ilham Aliyev has traded nearly £400m in UK property in the past 15 years. Notably one property was purchased by the Queen’s crown estate for £67m, prompting an internal review. This represents a headache for the Crown Estate, given that Aliyev has overseen human rights abuses, rigged elections and corruption in his own country.
King Abdullah II, the ruler of Jordan in the Middle East, has amassed a $100m property empire, with homes in London, Malibu and Washington. His portfolio includes seven Luxury UK homes, including three in London’s Belgravia, which were purchased between 2003 and 2011 and have a market value of around £28m. the UK sent £100m a year to Jordan in bilateral aid during that period.
Uhuru Kenyatta, Kenya’s president, has amassed over $30m of offshore wealth, including property in London with his relatives. He has questions to answer after previously saying in public that every public servant’s assets should be declared publicly.
Former Prime Minister Tony Blair, along with his wife Cherie, have also been caught up in the storm. They avoided paying around £312,000 in stamp duty when acquiring a commercial building owned by an offshore company for £6.5m in 2017.
The Pandora papers were leaked to the International Consortium of Investigative Journalists in Washington, which shared the documents with global media outlets like the BBC and The Guardian.
London’s role in the super rich hiding their wealth isn’t limited to property.
Clients of Mossack Fonseca, the defunct law firm at the heart of the Panama papers storm in 2016, have simply moved their companies to other providers, including one which has a major office in the UK capital.
The revelations raises the question of whether politicians have any incentive to change the role of tax havens, since many have money secretly parked overseas.
Chancellor Rishi Sunak has been forced to deny that London is the tax avoidance capital of the globe.
Speaking on the BBC Radio 4’s Today programme, he said: “I don’t think it’s a source of shame because actually our track record on this is very strong.
“As you’ve seen from the papers, it’s a global problem, there’s a global dimension to it and we need other countries to co-operate with us to tackle this, but we’re determined to do that.”