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Figures released by the Land Registry reveal that more than £100 billion of property in central London alone is held in offshore companies and therefore avoids certain taxes.

The Sunday Times analyzed an inventory of 18,700 title deeds, obtained through a Freedom of Information Act request, and found that millions of pounds could be lost through a loophole.

By holding property through offshore companies home owners can avoid weighty stamp duty land taxes.

For properties over £1m stamp duty is calculated at 5% of the property price. But stamp duty can be reduced to 0.5% if a property is transferred through the sale of company shares instead of through the usual transaction between individuals.

Placing property in offshore companies can also mean the avoidance of inheritance tax, charged at 40%.

Experts calculate that the tax dodge means around £330m-£500m a year is lost in stamp duty and £1.3 billion in inheritance tax.

More than one in 20 properties in Central London are owned offshore, while cities such as Manchester, Leeds, Derby and Coventry are also popular with property owners using tax havens.

The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.

Published on our website on February 1, 2012