Britain’s biggest taxpayer has moved his multimillion-pound property empire offshore before a tax raid by Rachel Reeves.
Fred Done, the billionaire owner of the bookmaking chain Betfred, moved his property trading group to Jersey a month before new inheritance taxes on family-owned businesses came into force.
Mr Done and his brother Peter were Britain’s biggest taxpayers last year, paying £400m in tax, half of which relates to gambling duty from their betting shop empire. His family’s net worth sits at nearly £3bn.
In addition to Betfred, which runs more than 1,600 betting shops in the UK, Mr Done owns a number of other businesses, including the Fred Done Property Trading Group, which develops and sells residential and commercial property.
The business moved to Jersey on March 24, according to filings at Companies House.
The change came less than two weeks before Ms Reeves removed an inheritance tax exemption for family-owned businesses, which Mr Done’s group would have been likely to qualify for.
The new structure, which includes ultimate ownership by a trust, could save tens of millions in taxes, lawyers said.
However, it is understood that the company will remain a UK taxpayer and it will still be eligible for some inheritance tax in the UK. Fred Done and his family will also remain UK taxpayers, including for inheritance tax purposes.
Under a scheme known as Business Property Relief, family-owned businesses were previously exempt from inheritance tax. But from April 6, the Treasury has capped the exemption.
Inheritance tax is now charged on assets above £2.5m, albeit at a reduced rate of 20pc.
‘Dying under the new rules’
Christopher Groves, a partner at international law firm Withers, said a number of clients were looking to make similar moves to Mr Done as a result of Labour’s changes to the business property relief exemption, or leave the UK altogether.
Mr Groves said: “The reason why we don’t have billion-pound unicorns [privately owned start-ups with a valuation of more than $1bn] … is because their business can’t stand them dying under the new rules.
“We’ve got clients who are in a position where the [tax charge] is so large, it’s uninsurable, the consequences of the businesses are so significant that they can’t afford to stay in the UK.”
He added: “Not because of what it saves them because they’re dead, but because of what it would do to the business they spent their lifetime building up and want to succeed.”
The Fred Done Property Trading Group’s projects include a 41-storey apartment-and-hotel complex in Manchester, which is being developed by Gary Neville’s Relentless Group. Mr Done’s company provided financing for the development.
According to the latest set of accounts, the total value of the company stands at £93m.
Mr Done has warned about tax rises under the Labour Government. Last year, he said that all of Betfred’s thousand-odd betting shops could disappear from the UK high street if Ms Reeves increases taxes on gambling firms.
