Shropshire Council will not have to pay millions in taxes on shopping centres purchase
Shropshire Council will not have to pay millions of pounds in taxes on its shopping centre purchase because it will be made from an offshore trust, senior council sources have confirmed.
Earlier this year the council agreed to buy Shrewsbury’s Darwin and Pride Hill shopping centres, as well as the lease on Riverside Shopping Centre, which it owns.
The cost of the deal has been estimated at between £50 and £60 million, although the council has not confirmed the official figure due to what it says is “commercial confidentiality”.
It has now emerged that the centres will be bought from an offshore trust, meaning the authority will not have to pay stamp duty on the deal.
The centres are being bought from UK Commercial Property Trust.
The council said it would move the trust “in shore” in six to 12 months’ time.
The purchase of the centres is due to be completed on January 23 although the council has declined to make any comment on the tax arrangements of the deal,
The authority plans to revamp the centres and take over the running of the Riverside, which it already owns, to bring in extra revenue.
No stamp duty or VAT is paid on the transfer of assets, such as the centres, to a trust based in Jersey.
Earlier this month the council’s leader Peter Nutting spoke about options for the future of the Riverside, and said it could be demolished to make way for a completely new mixed-use development.
The Copthorne Councillor also suggested new car-parking could be created on the site.
He said: “The Riverside is the big question. I think it will be demolished and we will start again on the whole site.”
The council sees the purchase as a way to generate income as it battles with its own budget problems.
Speaking when the move was revealed the authority’s chief executive, Clive Wright said the purchase would ensure the council was leading the economic growth and regeneration of Shrewsbury’s town centre, with a knock-on benefit for the rest of the county.
He said: “This is capital expenditure and it is an investment that is primarily about the regeneration of the town centre – something we have been working on that the public have wanted us to do for some time.
“It matches the development on highways, bringing housing into the town, and attracting new retailers like Primark. It all fits into that.“It is very exciting.”
“It is primarily about regenerating the town centre and attracting visitors, but also getting a good return on our investment.”