I find it amazing that there are (at least) 2 sides to Tesco, one where they offer great deals and online shopping and loyalty cards etc, the other where they are tax evasion masterminds. Im no genius on tax, but it does seem like they have an internal workings philosophy and an external one that seem to be polar opposites.

a) They sold 50% of the economic value of the properties to a third-party. Had they done this in a particularly stupid fashion, they’d have had to pay tax as if they’d sold 100% of the properties’ economic value. They didn’t, and so have paid tax only on the 50% economic interest disposed of. Put like this, it’s not really the most startling of revelations.

b) SDLT may have been avoided. This wouldn’t have been paid by Tesco in any case, and certainly wouldn’t have gone anywhere near the tax number in the accounts.

Ah, they’ve had to apologise for the PFI article they ran a few days later…

The one thing I will add, which seemed a tad gittish to actually say in the comments on the post, is that a man whose CV lists almost 30 years of tax experience, should have been able to come to the same conclusion as me with a bit of thought. It’s not exactly relying on obscure bits of case law or lacunae in the legislation. [1].

Well, that and the enormous shedloads of money.

Like I say, though, even if Tesco were deriving some short-term cashflow benefits from this, it can’t avoid paying up in the long run. Unless it’s hoping that an incoming Tory PM will declare a US-style amnesty on dividends from abroad, I suppose…

Do you know what the advantage to Tesco is of structuring the sale and leaseback via the Caymans?