Richard Branson moved assets from the US to the British Virgin Islands, highlighting his use of tax havens at a time one of his businesses sought a state bailout because of the coronavirus pandemic. This comes as his airline Virgin Atlantic is in the process of receiving a massive taxpayer bailout from the Britihs public.
Filings show a Delaware-based company for his $1.1bn stake in Virgin Galactic Holdings transferred shares in the space-travel firm on March 16 to the Caribbean territory where Branson lives. Residents in the BVI pay no income or capital-gains taxes while the US state is known for preserving the privacy of its corporate owners.
Virgin Galactic became the first publicly traded space-tourism firm in 2019 after merging with a listed investment vehicle, and the Delaware holding company was set up for that transaction.
“This is as an internal reorganisation that has no effect on our ownership interest. Rather than continuing to hold the shares indirectly, we undertook this exercise to eliminate indirect ownership through that subsidiary, as the US entity was no longer necessary.”
Virgin Atlantic, Branson’s airline, has been hard hit by the pandemic. In March, consultations with staff saw employees agree to take eight weeks unpaid leave. The company has requested that the British government provide hundreds of millions of pounds in government-backed loans and credit guarantees, part of a broader request for the aviation industry.
Alex Cobham, CEO of the Tax Justice Network said: “For the public, the concern may be more that the owner of global businesses appears happy to structure his ownership through some of the most opaque jurisdictions in the world. The same person is now appealing for public support.”
Branson said about Coronavirus: “This is the most significant crisis the world has experienced in my lifetime. Because many of our businesses are in industries like travel, leisure and wellness, they are in a massive battle to survive and save jobs.”
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