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From Caithness to the Caribbean … the murky origins of Scotland’s landowners

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Thousands of parcels of land across Scotland have been snapped up by offshore companies with large numbers based in one of the world’s premier tax havens.

As part of our probe to determine who really owns Scotland, we looked beyond the titled lairds and foreign billionaires who own huge swathes of the country, and discovered large land and property portfolios are now in the hands of firms registered in notorious overseas territories.

In total, 2,147 commercial and residential developments are currently owned by companies based outside the UK.

One in five of those are headquartered in the British Virgin Islands in the Caribbean.

The archipelago which has a population of just 28,000 was embroiled in a tax evasion scandal two years ago.

At the centre were hundreds of ultra-wealthy Britons who were accused of using secretive accounts to hide their vast fortunes.

It’s feared the offshore firms which have snapped up parts of Scotland may be using similar tax-dodging tactics.

An eye-watering £13.5 trillion equivalent to the total annual economic output of the US and Japan combined is believed to be hidden away in low-tax, low-regulation juris-dictions such as the British Virgin Islands.

But its effect here is simple it can lead to a greater tax burden on everyone and a strain on services across Scotland.

Indeed, experts have previously voiced fears the UK Treasury is losing hundreds of millions of pounds every year due to offshore tax avoidance.

The message has been underpinned by anti-corruption group Transparency Inter-national, which has warned Scotland and the rest of the UK has become “a safe haven for corrupt capital stolen from around the world”.

John Christensen, of international research and advocacy group The Tax Justice Network, said offshore investment “should concern us all”.

He added: “We’d like to see a full disclosure and a public record of who owns these companies.

“We need extensive reform across all the UK to stop offshore companies buying up our country.

“Many of these offshore companies are run by Brits who use them to cut down on their tax bill.”

There is also a fear offshore companies could provide a front for criminal organisations who seek to use property purchases for money laundering.

In London the problem is said to have reached crisis proportions, with offshore Mr Bigs pushing up property prices.

PM David Cameron has now intervened and declared a war on “dirty money”, which it is hoped will force foreign “shell” companies to declare who they are buying for.

The Sunday Post can also reveal Police Scotland is taking offshore ownership of Scottish properties extremely seriously.

It has launched a wide-ranging investigation to uncover any criminality.

Officials said the force was “aware” criminals would use any means available through which to hide criminal assets including the use of offshore companies.

A spokesman added: “We are investigating the use of offshore companies using criminal funds to purchase properties.

“Working with international law enforcement we have been able to identify and trace criminal assets held in offshore companies and tax havens.”

Scottish Conservative chief whip John Lamont said officers were quite right to be looking into this murky area.

“We cannot have a situation where criminals are hiding their ill-gotten gains right under the noses of Scotland’s communities,” he said.

Labour MSP Hugh Henry said: “Police Scotland is right to be worried that in some cases, crooks could be using weak tax laws to launder their dirty money.

“We cannot afford to unwittingly become a major money laundering centre.

“These figures revealed by The Sunday Post are of real concern.

“While this requires vigilance and robust action from Police Scotland, it also needs the UK Government to tighten up tax rules which could help criminals not just to avoid tax, but to move their crooked money at will.”

One global body has been trying to help shed some light on the secretive world.

The Organisation for Economic Co-operation and Development has compiled a list of countries and havens “committed to improving transparency and establishing effective exchange of information in tax matters”.

The 38-strong-list includes countries like Liberia, Belize, Cyprus and Bahrain.

It also includes British Overseas Territories such as the British Virgin Islands, the Cayman Islands, the Turks and Caicos Islands, Gibraltar and Montserrat and the Crown Dependencies of Jersey, Guernsey and the Isle of Man.

However, the fact companies based in those territories currently own three-quarters of the foreign deeds discovered by us shows the body has a way to go.

The Scottish Government has also made attempts to combat the problem.

It consulted on banning non-EU companies from being allowed to buy land here in the Land Reform Bill in December.

But when the Bill was published last month the proposal had been dropped.

Our probe has been unable to find out exactly how many acres of Scotland are owned by companies based in so-called tax havens, as Registers of Scotland doesn’t hold that information.

It says there could be far more as some offshore companies don’t tell it where they are based.

Its register also doesn’t include some historic land deals.

The country’s first proper Land Register is being completed by the RoS but won’t be completed until 2024.

Earlier this year, the Metropolitan Police’s Proceeds of Corruption Unit found 75% of properties owned by people under criminal investigation for corruption are held through secret offshore companies.

The force found more than £180 million worth of UK property has been investigated in the last decade as the likely proceeds of corruption.

The tangled web of businesses operating in the UK

Question: WHAT do a tax office in Aberdeen, flats in Dundee and a pub in the outskirts of Glasgow have in common?

Answer: They are all owned and registered to offshore companies.

We examined a handful of cases to show how ubiquitous offshore firms have become in our everyday lives.

We even discovered offices rented by the tax office in Aberdeen are owned by a company registered overseas.

The Her Majesty’s Revenue and Customs (HMRC) offices in the city centre’s Ruby House are registered to Mapeley Steps Limited in Bermuda.

The office deal is part of UK-wide rent agreement between the taxman and Mapeleys, which netted the property firm a reported £260 million in 2013 alone.

However, the accounts committee called the deal with Mapeleys a “massive own goal” when it first came to light in 2012.

The National Audit Office also slammed it, saying it would not realise savings. However Mapeley disagreed and said that the deal was beneficial for HMRC.

The firm said they had “no comment” to make when contacted by The Sunday Post.

In Dundee, Liberia-based property firm H&H Property Limited owns eight houses and flats in the city, according to Registers of Scotland.

We approached Dundee’s H&H Property UK ltd’s director Hassan Al Saffar to see if he had any involvement with the Liberian company.

He said the Liberian firm “no longer trades”.

He added: “To the best of my knowledge there are no property assets of any kind within the company.”

In Rutherglen on the outskirts of Glasgow, Karaoke bar the Cathkin Inn is registered in the Cayman Islands.

The bar is owned by Star Pubs and Bars which used to be brewery giant Scottish & Newcastle plc’s pub lease business.

A spokeswoman for Star Pubs & Bars said due to a “technicality regarding the transfer of titles” the Cathkin Inn was still registered to a dissolved offshore company.

In My View – by Nick Maxwell of anti-corruption charity Transparency International UK

We believe there is growing evidence that the UK property market has become a safe haven for corrupt money stolen from around the world.

But the practice also extends to people trying to minimise their tax bill by registering properties to offshore companies.

It means owners can cut out some taxes associated with buying properties.

Both these practices are facilitated by laws which allow UK property to be owned by secret offshore companies, who never reveal who is behind them.

It’s a cause of concern that this information is not freely available to the public in Scotland and it has taken The Sunday Post to commission a report for the information to come to light.

We campaign for greater openness and transparency to help limit the space for corruption.

That extends to our organisation calling for a public register that makes it very clear who owns the companies which own so much of the property in the UK.

It is already a requirement of companies based in the UK and should be extended to offshore firms who own UK property as well.

The case for the UK as a haven

Former Nigerian governor James Ibori cynically siphoned off millions of pounds from his country. He used offshore companies to buy a host of properties across London including a

six-bedroom house with an indoor pool in Hampstead for £2.2 million.

He was jailed for 13 years in 2012 for fraud and money-laundering.

In 2012, Libyan authorities seized the £10m London home of Saadi Gaddafi, playboy son of the former Libyan ruler. The post-revolutionary government was desperate to seize back billions of pounds plundered by the Gaddafi clan and laundered abroad.

Scotland’s Offshore Map

There are 33 Scottish counties on the Land Register one more than Scotland’s 32 councils.

These are the top 10 counties by foreign ownership according to the Sunday Post probe.

COUNTY/ NON-UK FIRM OWNERSHIP/ Organisation for Economic Cooperation and Development list of countries committed to improving transparency/ (BIGGEST OWNER)

Glasgow-464-320 (British Virgin Isles 100)

Midlothian-397-234 (BVI 93)

Lanark-196-149 (BVI 40)

Aberdeen-149-115 (BVI 36)

Fife-108-54 (BVI 14)

Perth-97-57 (BVI 23)

Renfrew-87-45 (BVI 17)

Ayr-68-48 (Jersey 13)

Dumbarton-67-48 (BVI 11)

* There are as many properties in Scotland registered to firms based in Liberia as there are to companies based in France.

The west-coast African country has a long-standing reputation for being soft on tax, particularly when it comes to the field of shipping.