U.K.’s richest family has paid only $25 tax in 60 years

Press, 7 October 1980, Page 9

U.K.’s richest family has paid only $25 tax in 60 years

NZPA London The richest family in England paid only £lO ($25) in income taxes during a 60-year period because of a loophole in British tax laws, the “Sunday Times” has said. The Vesteys family, pillar of the British “Establishment” and owner of a vast industrial and commercial empire, avoided paying nearly one million pounds ($2.5 million) in taxes by transferring their income to trustees living abroad, especially in Uruguay. Under British law, these trustees can redeposit these funds in Britain without the funds being considered income. A senior member of the family, yesterday justified his business practices as “we paid exactly what we were obliged to pay.”

Edmund Vestey, jointcontroller of the worldwide Vestey empire, said that many other companies had also used a loophole in the law to avoid paying tax. The Vestey family, which owns the Dewhurst chain of butchers’ shops, has a vast fortune in shipping (including the Blue Star Line), clothing, and insurance.

“We paid exactly what we were obliged to pay,” said Mr Vestey at his home in Saffron Walden, Essex.

“We have certainly kept to the letter of the law. If you want to interpret this as bending the spirit of the law, that is your interpretation.” Mr Vestey, who is jointowner with Lord Vestey of the Union International Company, said that the

“Sunday Times” article Implied '■ the family had tried their best to avoid paying every possible penny of income tax, and then pocketed the cash.

“What we have done is to leave as much money as we can in the business/’ he said. “Everyone needs to be putting new capital back into business.

“Without money to plough back; the company may have had to go public to raise funds,” he said. Mr Vestey, whose poloplaying family rubs shoulders with royalty, added that foreign business competitors did not have similar income-tax laws to contend with.

“I think that quite a lot of other British companies are in the same position as us,” he said. The Treasury said yesterday that section 412 of the 1952 Income Tax

Act was now being reviewed by the Government after a decision by the Law Lords last November which favoured the Vestey family. The Law Lords ruled that while the Vesteys, over a particular four-year period, were liable to income tax on $10.5 million and surtax on $17.8 million they need not pay a penny. But in making their judgment in November last year the Law Lords, through Lord Dilhorne, said: “In this complicated case at least one thing is clear, and that is the urgent need for reconsideration of the terms of section 412.” The Vesteys’ method of tax avoidance is complicated, but centres on the transfer of assets abroad, in the Vesteys’ case, to Uruguay.