Pandora Papers

The publication of these papers about tax avoidance by the wealthy has generated the predictable torrent of righteous indignation. The most obvious points have been missed.

UK property features prominetly among the assets which have been sheltered in tax havens.  The property has not been off-shored anywhere. You can see most of the off-shored UK property in the two pictures of Central London, above. Much of it is on the number 11 bus route, and concentrated in the London Boroughs of Westminster, and Kensington and Chelsea.  Residential property in these boroughs is subject to disproportionately low rates of property tax, due to the banding system used to calculate Council Tax and the fact that the amount payable in not proportional to the values of the properties. The sky-high property values (land values, though not taxed as such) in Central London, put a large proportion of residential properties in the top Council Tax bands. As a result, a low rate of tax can generate ample revenue. A simple reform of the Council Tax, with payments made directly proportional to the values, and a national component added, would largely solve the problem at a stroke.

As we have been saying endlessly for decades, to solve the problem completely the UK property tax system needs to be rationalised, with Council Tax, the UBR and Stamp Duty replaced by a single tax based on annual site values and payable by the registered owner of the land title, whoever or wherever they are. If the tax is not paid, then the title simply lapses and the ownership is forfeit. Why is this point lost on all the indignant commentators?