UK Daily Mail
Saturday, Aug 16, 2008
Investment bank Merrill Lynch may not have to pay UK tax for decades.
The Wall Street giant, which employs 5,500 in the City of London, could be eligible for a tax holiday of more than 50 years after making billions of pounds of losses on ‘exotic investments.’
The possibility of such a business escaping tax will astonish households struggling with their personal finances.
(Article continues below)
The collapse of profits among all the banks have led to a dramatic fall in their tax burden –which means a big hole in the Treasury’s books.
Merrill Lynch racked up losses of £15.5billion because of the sub-prime meltdown in America.
The losses were booked in its UK subsidiary Merrill Lynch International, because this is the unit through which it conducted its business in exotic financial instruments –repackaged debt.
Merrill can use the losses to offset its tax liability – by as much as £4.3billion – in future years. Accountants say the bank is fully complying with tax law.
This article was posted: Saturday, August 16, 2008 at 4:36 am