How debt crusader Geldof could save £1.6m in death tax

Bob Geldof campaigns tirelessly to persuade the British Government to use taxpayers' cash to alleviate Third World poverty.

But the pop star's own financial affairs appear to be arranged in a way that could potentially deprive the Exchequer of £1.6million.

Geldof, an Irish citizen, lives in two properties in the UK, which are owned by overseas companies.

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Land Registry documents show that his luxury apartment in Battersea, South London, is owned by a company called Quiet Ventures, while Davington Priory, a mansion near Faversham, Kent, is owned by Bandol Holdings.

Both companies are registered in the British Virgin Islands and have London contact addresses linked to Geldof's accountants, O.J. Kilkenny.

As Geldof is a non-domiciled taxpayer, it means the houses - together worth an estimated £4million - would avoid the normal inheritance tax of 40 per cent, or £1.6million.

Tax expert Mike Warburton, of nationwide accountants Grant Thornton, said owning property through companies based in tax havens was a classic tax-avoidance device for non-domiciled citizens.

"It allows property owners to escape inheritance tax," said Mr Warburton, "and means they do not have to pay capital gains tax if they sell a property that is not their main residence."

Also, stamp duty on the purchase of UK properties costing more than £500,000 can be reduced from four per cent to 0.5 per cent by complicated deals between the holding companies.

Patrick Savage, Geldof's accountant at O.J. Kilkenny, claimed that the Land Registry details showing the star's Battersea home is owned by Quiet Ventures were a mistake, which he would rectify.

Friends of Geldof said he was unaware that the arrangement could save his children from paying inheritance tax. But they described it as "good news".

Geldof declined to comment.