Richard Branson shifts Virgin Galactic stake to tax haven
The move is unrelated to Branson’s request for UK backing for Virgin Atlantic Airways, and many of his businesses do pay UK tax
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.
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.
The move is unrelated to Branson’s request for British backing for Virgin Atlantic Airways, and many of his businesses do pay UK tax. He’s also pledged $250m to support his group’s operations since transferring his shares in Virgin Galactic.
“This is as an internal reorganisation that has no effect on our ownership interest,” a representative for Branson said. “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.
“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,” said Alex Cobham, CEO of the Tax Justice Network. “The same person is now appealing for public support.”
Many billionaires maintain their assets in tax havens.
Two years ago, four Chinese tycoons transferred more than $17bn into family trusts with the ownership structures involving various Caribbean jurisdictions, while a trio of tax havens support the significant wealth of Stefano Pessina, CEO of Walgreens Boots Alliance.
Branson has started businesses from fizzy drinks to bridal gowns. His rocket company, Virgin Orbit, is now looking to join the rush to make ventilators for the virus crisis, while Virgin Atlantic’s CEO is taking a temporary pay cut.
“This is the most significant crisis the world has experienced in my lifetime,” Branson said in a March 22 blog post. “Because many of our businesses are in industries like travel, leisure and wellness, they are in a massive battle to survive and save jobs.”