Jeremy Hunt avoided more than £100,000 in tax in a £1.8 million property deal weeks before the 2010 election, The Daily Telegraph can disclose.The Culture Secretary was paid a dividend by the company he founded in the form of half its office building. The offices were then immediately leased back to the same company.
Accountants said that the deal allowed Mr Hunt to legally reduce his potential tax bill by more than £100,000 because it was completed just days before an announced 10 per cent rise in the tax on dividends in April 2010.
Earlier this week, David Cameron said he would not associate himself with anyone who carried out “aggressive tax avoidance”, while George Osborne, the Chancellor, previously said he was “shocked” by the scale of tax avoidance by some of Britain’s richest people.
The Culture Secretary and his business partner, Mike Elms, transferred ownership of their company’s office building in Hammersmith into their own names in April 2010, just before the tax rate for the transaction rose to 42.5 per cent. They then leased the property back to Hotcourses, their jointly owned education company, for 10 years.
By paying themselves the building as a dividend before the change in tax rules, the two men saved themselves an income tax bill of £202,000 on the £1.8 million deal, by paying tax on it at the rate of 32.5 per cent. The company now pays them £60,750 a year in rent. No stamp duty was payable on the property, which at the time would have been 4 per cent...read more