Canary Wharf Group Investment Holdings plc – Tax strategy
This document outlines the tax strategy of Canary Wharf Group Investment Holdings plc (“CWGIH”) and its fellow group companies (“Canary Wharf” or “the Group”) and sets out its approach to tax and the management of its relationship with HM Revenue & Customs (“HMRC”). It has been prepared by Canary Wharf’s in-house tax department and has been reviewed and approved by CWGIH’s Board of Directors.
Canary Wharf seeks to comply fully with its tax reporting obligations in the UK and in other jurisdictions and to provide support to its investors and stakeholders to help them comply with their reporting obligations.
The group employs an in-house tax team who are responsible for identifying and managing risk associated with tax across the group, and also ensuring that tax returns and payments of tax are submitted accurately and on time. This team is supported by external advisors where necessary.
It is Canary Wharf’s policy to avoid engaging in any transaction or structure that it considers to be contrary to the spirit and purpose of tax legislation, or seeks to rely upon non-disclosure (in whole or in part) to HMRC. This includes where a tax advantage may be exploited by a third party.
Taxation as a REIT
The Group became a real estate investment trust (“REIT”), which is an internationally recognised regime for investing in real estate, on 29 March 2018.
As a REIT, profits in respect of our UK property rental business are exempt from UK corporation tax provided that a number of conditions are met including obligations to distribute at least 90% of relevant annual profits from the UK property rental business to shareholders as a property income distribution each year.
The Group is also subject to a number of taxes including corporation tax on non-REIT income and gains; Stamp Duty Land Tax; Pay As You Earn; Employer’s National Insurance; Apprenticeship Levy; Business Rates; irrecoverable VAT; and various environmental taxes.
Approach to risk management and governance arrangements in relation to UK taxation
The effective assessment and management of risk (including tax risk) is key to the delivery of the Group’s strategy. The Board of Directors has the responsibility of establishing the Group’s appetite for risk based on the balance of potential risks and returns in achieving its strategic objectives and has overall responsibility for identifying and managing risk. Risk management is embedded in Canary Wharf’s culture, and employee training.
The Chief Finance Officer (‘CFO’) has executive responsibility for the Group’s tax matters and is the appointed Senior Accounting Officer. The CFO and Director of Tax provide updates to the Board for all material tax issues and risks affecting the Group.
Day-to-day management of the Group’s tax affairs is the responsibility of the Director of Tax who reports directly to the CFO. The tax team is led by the Director of Tax, and to meet its commitments it seeks to employ appropriately qualified professionals and ensure that appropriate training is provided for employees involved in the tax process.
Management of tax risk is achieved through:
- The audit committee whose key responsibilities include the monitoring and review of the effectiveness of the Group’s internal control and risk management framework and overall approach to monitoring areas of risk, including prevention of the facilitation of tax evasion;
- Working with business units to ensure that the Director of Tax is aware of strategies and transactions at an early stage so that the tax consequences and risks can be identified and managed;
- Monitoring changes in tax legislation and practice so that the effects can be taken into account;
- Maintaining systems and controls to ensure that tax returns are accurately prepared and submitted in accordance with statutory time limits;
- Ensuring that other finance functions are aware of and consider relevant tax issues;
- Reviewing financial statements of Group companies to ensure that tax disclosures are in accordance with relevant statute and guidance and that all matters of tax significance are identified and treated appropriately;
- Obtaining advice from external consultants where necessary.
Canary Wharf’s attitude towards tax planning
Responsible and commercial tax planning is undertaken where necessary so that transactions do not give rise to tax liabilities in excess of those required by law and double taxation does not arise.
The Group will not enter into any tax planning arrangements that it considers to be abusive.
The Group aims to comply with all relevant legislation and practice in relation to its tax affairs, paying taxes due that are commensurate with realised income, profits and gains and in accordance with the law and practice.
The Group will seek appropriate tax advice from external advisors where:
- Transactions are complex; and/or
- The law applying to a particular transaction is uncertain; and/or
- The amounts at stake are substantial.
Clearances may be sought from HMRC where possible.
Our relationship with HMRC and level of risk
The Group has a low tolerance for tax risk. Canary Wharf are committed to acting with integrity and transparency in all tax matters, and the Group has an open, up-front and no-surprises policy in dealings with HMRC. The Group are in regular discussions with its customer compliance manager at HMRC, HMRC are kept informed and are asked for pre-clearance where applicable in relation to complex areas and transactions.
In summary, The Group looks to minimise the level of tax risk and at all times seeks to comply fully with its regulatory and other obligations and to act in a way which upholds its reputation as a responsible corporate citizen.
 This strategy, published on 15 March 2023 applies to Canary Wharf Group Investment Holdings plc and all the members of its group subject to UK tax (“The Group”) and meets the requirements of paragraph 16(2) Schedule 19 to the Finance Act 2016 in respect of the accounting period ended 31 December 2022.
Click here to view our 2021 Tax Strategy