LONDON: Zac Goldsmith’s luxury Costa del Sol villa – where Boris Johnson holidayed last month – has been linked to a multi-million-pound tax evasion probe.
According to Spanish court papers, the Torre Tramores estate near Marbella is linked to two of the Goldsmith family’s property businesses, which were ordered to pay €24m (£20m) in unpaid taxes and fines.
The tax authority could now legally seize parts of the family’s land – consisting of more than 600 hectares of private woodland in Benahavis, 10 miles from the Marbella coastline – if they don’t pay up.
But a lawyer for one of the companies told the Guardian that the dispute stems from a land valuation error, dubbing the case as ‘extremely hard to understand’, while Ben Goldsmith, Zac’s brother, said the whole affair should serve as a ‘warning for Brits thinking of owning a property in Spain.’
Johnson caught controversy when he stayed at the villa with his wife Carrie and son Wilfred last month, while the country was battling a fuel crisis and suffering through the supply chain crisis.
He is likely to now face questions over whether he knew the home was linked to an investigation by the Spanish tax authorities.
The investigation is said to have begun in Spain almost ten years ago, in 2012, when tax inspectors probed a deal which saw one of the Goldsmith companies transfer land on a large estate to a related company, reports the Guardian.
Court documents from 2008 show the family transferred plots of land near Benahavis village from Guadalmansa Administraciones to Benaltos Inversiones – in exchange for settling a €5m debt.
But the authorities accused the debt of being ‘fictitious’ and said it should have been labelled a ‘profitable transfer’ instead of debt repayment.
They also said the land was significantly undervalued in the deal and that it was actually worth €23.2m.
The companies were ordered to pay €24m in unpaid taxes, interest and penalties for allegedly violating a legal requirement which states that transfers of assets between related entities must be priced at their normal market value.
Authorities also said the companies had not properly declared their financial gains from the transfer in their tax returns.
The Goldsmith companies appealed to the central economic-administrative court (CEAT) in 2016 – insisting that the debt was genuine and that the €23m land valuation was flawed.
However, their appeal was rejected when the court agreed the debt was fictitious.
It said the deal was not a standard arrangement, citing the fact that ‘several companies domiciled in tax havens’ were involved ‘for no apparent economic reason’.
The CEAT also believed the valuation by tax inspectors to be kosher given that less than a year after the transfer, the land was used as security for a loan worth €23m – adding it had ‘no doubt’ Benaltos was guilty and that its improper actions had ‘resulted in a loss to the public treasury’.
The ruling was upheld by the Audiencia nacional, one of Spain’s highest courts, two years later in 2018.
A further appeal is believed to have been filed by the companies with the country’s supreme court.
The Swiss lawyer for Guadalmansa told the Guardian that the Spanish tax inspectors significantly overvalued the property, adding that the assessment was ‘based entirely on one wildly aberrant valuation’ by an agency-appointed valuation company which has since acknowledged they ‘made a mistake’.
