Aussie taxman halts Virgin cash transfer
A Report in The Times in London says that Sir Richard Branson has has been blocked in an attempt to take more than £37m out of Australia.
The tycoon has been told by a court the money must stay in the country pending the outcome of a dispute with tax authorities.
Branson has been involved in a long-running battle with the Australian Taxation Office over money his companies made from the flotation of budget airline Virgin Blue in 2003.
The tax authorities say two of Branson’s Swiss-based companies, Cricket and Virgin Holdings, were liable to pay capital-gains tax on the sale of stakes in the Australian operator. Virgin denies the liability.
The dispute has yet to be resolved, but in the meantime, the tax office has said that A$84m to cover the potential bill should stay in Australia.
The country’s tax laws say that a company that controls money due to a nonresident can be forced to hold on to the cash and not send it abroad.
In November 2005 Virgin Blue said it wanted to make a dividend payment to Branson’s Swiss-based companies, but the tax office issued a notice that the money stay in Australia.
Just before the dividend was to be paid, Branson’s Swiss companies entered into a complex series of deals that the tax authorities said were aimed at sidestepping the order.
The New South Wales Appeal Court ruled the money should stay in Australia until the argument is resolved. Six judges in Australia’s High Court have backed that decision.
One of the Swiss companies, Cricket, is the vehicle through which Branson’s private business empire retains a 25% stake in Virgin Blue. Virgin Group said this weekend it was “still in discussions” with the Australian Taxation Office.
A full hearing will be held in the federal court later this year.
A Report by The Mole from The Times
John Alwyn-Jones
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