FBR probing purchase of property in UK, Senate panel told

Property not owned by an individual but a company whose entire equity duly included in owners assets reported in wealth statements since year ended June 30, 2011

ISLAMABAD: The tax authorities on Wednesday informed the Senate panel that they were conducting investigation to ascertain facts regarding purchase of Saint James Hotel and Club by renowned business tycoon in the United Kingdom (UK).

The Senate Standing Committee on Finance sought details from the FBR and SBP regarding purchase of Saint James Hotel and Club by Mian Mansha family at 60 million UK pounds equivalent to Rs9 billion.

FBR Chairman Nisar Muhammad Khan told the committee that the tax law did not allow him to share information about tax return of any individual but they provided some relevant information for the sake of parliamentarians respect.

FBR Director General Intelligence and Investigation Inland Revenues Haroon Tarin told the committee that they were conducting investigation and made contacts with UK tax authorities and Singapore tax authorities for matching details after which they would be able to come up with final findings.

The written reply tabled before the Senate committee stating that the Directorate I&I, IR received credible information that members of Mansha family had purchased St James Hotel and Club, 7-8 Park Place, London, UK from Messrs Mountain Capital during November, 2010 through Savills and Gerard Nolan and Partners for a total price of sixty (60) millions UK pounds equivalent to 9 billion Pak rupee.

This information was also available on various web sites. Accordingly a notice under section 176 of Income Tax Ordinance, 2001 was issued to Mian Muhammad Mansha, NTN: 1682525 seeking information/clarification about the said transaction and the nature and source of investment made therein and non declaration of the same in the wealth statements.

In response to the said notice, Group Tax Manager of the family clarified vide letter No 2863 dated 9th September, 2015 that the aforesaid property was not owned by any individual but was 100 percent owned by Messrs Sea Capital Limited, a company incorporated in the United Kingdom. The latter entity again was reported to be a fully owned subsidiary of a Singapore entity Messrs Residentia Holdings PTE Limited, which had financed the acquisition of Messrs Sea Capital Limited through a mix of debt and equity.

It was further clarified that Mian Muhammad Mansha had no interest in any of the aforesaid entities and three (3) individuals (Members of Mansha family viz Mian Umer Mansha, Mian Hasan Mansha and Mrs Aimal Raza Mansha), owned the entire equity of Messrs Residentia Holdings PTE Limited, Singapore and the same had been duly included in their assets reported in wealth statements since year ended June 30, 2011.

Since Messrs Sea Capital Limited, UK is a 100 percent owned subsidiary of Messrs Residentia Holdings PTE Limited, Singapore, the entire equity of which is in turn owned by three members of Mansha family, the tax affairs of those three resident Pakistanis taxpayers (who purchased this property through a non-resident company) required further probe. For this purpose, a letter has been sent to FBR wherein it has been requested to requisition certain information relating to the members of Mansha family and the aforesaid M/s Sea Capital Limited, UK, under Article 26 of the Convention between United Kingdom of Great Britain and Northern Ireland and the Islamic Republic of Pakistan for the avoidance of double taxation and the prevention of fiscal evasion.

Once that information is received, a similar letter will be addressed to Singapore Tax Authorities for getting further information about tax affairs of M/s Residentia Holdings PTE Limited, Singapore, wherein original foreign investment was made by the aforesaid individuals, the FBR’s statement concluded.