Years after the ownership structure of Prime Minister Andrew Holness’ Beverly Hills home in Jamaica came under scrutiny for its ability to avoid taxes, the property located at Shenstone Drive now has a new title holder.

Its former owner, the St. Lucian offshore entity ADMAT INCORPORATED, has been dissolved. The IBC (International Business Company) was set up in February 2008 while Mr. Holness held office as Minister of Education, and according to statements in 2016 by him and his then attorney, Patrick Bailey, Mr. Holness was ADMAT’s only director, and he and his then underaged sons, Adam and Matthew, were the only shareholders.

ADMAT was dissolved in or around December 2021, about six months after St. Lucia activated new rules requiring all IBCs have real economic substance in St. Lucia, like having a physical premises and an adequate number of in-country qualified employees, in order to maintain active IBC status, which allows for income earned outside of that country to be exempt from taxes within St. Lucia. A company’s St. Lucian activities, however, would now be taxed at the local rate of 30%.

Previously, IBCs were prohibited from doing business with residents of St. Lucia, which included buying immovable property. The new rules were implemented by St. Lucia so it could be removed from a list of non-cooperative jurisdictions for tax purposes by the European Union, which argued that St. Lucia’s tax regime was among several in the Caribbean aimed at attracting profits that do not reflect real economic activity in the jurisdiction.

The criticism was that allowing companies to incorporate with mere P.O. Box addresses was leading to harmful tax competition, which threatened the corporate tax revenues of EU member states. St. Lucia remaining on the list could have potentially dissuaded foreign companies and investors from doing business in that Caribbean nation. 

It’s not clear whether ADMAT had derived any tax benefits before dissolution, but ADMAT did opt to be exempt from income taxes, its application documents show. That means, if no changes had been made since inception, St. Lucia wouldn’t have taxed income generated in Jamaica by ADMAT, for example, but, depending on the type of income, ADMAT may still have been required to pay taxes in Jamaica.

While actively registered in St. Lucia between 2008 and 2011, ADMAT bought the land on which the Shenstone Drive house was eventually built and at least two other Jamaican properties for around $57.1 million (US$692,478) for all three without any listed mortgages, raising questions about where the money came from. During that time, Mr. Holness’ salary as Minister of Education was averaging around $5.2 million (US$62,513) per year, not counting allowances.

According to a statement put out by Mr. Holness in 2016, he also spent an additional J$52.6 million (US$502,964) on building the Shenstone Drive house over four years beginning in 2012. That amount, he stated, was financed by “savings, salary, bank loans and suppliers credit.” (Mr. Holness’ finances will be further explored in a later story.)

After purchasing the land in 2011 on which the Shenstone Drive house was built, the registration of ADMAT lapsed for non-payment of annual fees. A St. Lucian court document shows that it was ordered restored upon an application being made and payment of penalties and fees amounting to US$5,550.

The registry in St. Lucia stamped the application Nov. 1, 2021, certifying its registration as being “effected for the year 2011-2021.” Upon restoration, it was “deemed never to have been struck off the Register.”

It was during this brief window of restoration between November 2021 and December 2021 that ADMAT transferred ownership of the Shenstone Drive house by way of gift on November 10, 2021 to Imperium Investments Holdings Limited, a company registered in Jamaica in June 2020 and whose purpose is “Investment in Assets of All Classes.” Imperium’s sole director and shareholder is Mr. Holness, who holds 600 of the 1,000 ordinary shares.

The remaining 400 shares are un-allotted, according to records at the Companies Office of Jamaica. That same month, on November 4, 2021, ADMAT also transferred another Beverly Hills property at Weycliffe Close in Jamaica, also by way of gift, to Estatebridge Development Limited, a company registered in Jamaica in July 2020 for “the construction, repair and alteration of buildings.”

Estatebridge has as its shareholders Mr. Holness’ Imperium Investments, which owns 4,001 of the 10,000 ordinary shares; his son, Adam, holds 2,000 shares; Mr. Holness’ sister, Sydjea Anderson, holds another 2,000 shares; a businessman, Norman Brown, in Montego Bay owns 1,000 shares, and 999 shares remain un-allotted. Mr. Brown is also chairman of the government-owned Housing Agency of Jamaica under the Ministry of Economic Growth & Job Creation and reports to Mr. Holness, who is that ministry’s presiding minister.  

The third property ADMAT had bought in 2008 – an apartment in Acadia in St. Andrew - had been purchased for $16 million (US$219,449) and sold eight years later in 2016 for only $16.5 million (US$131,852), as previously reported. The purchasers were a medical doctor, Kijana Barrett, and a field supervisor, Darron Murray.

Reached by phone, Mr. Murray refused to comment on the record as it was tried to understand whether there was a relationship between him or Ms. Barrett and Mr. Holness or his wife and why ADMAT would have sold the apartment at a loss in U.S. dollar terms of US$87,597 even before transaction fees.

It’s also not clear how the Acadia apartment transaction was allowed to go through in 2016 since the registrar in St. Lucia confirmed that, before restoration in 2021, ADMAT had been consistently struck off with no restoration in between since 2012. According to St. Lucia’s International Business Companies Act, a struck-off company and its directors “may not legally—(a) commence legal proceedings, carry on any business or in anyway deal with the assets of the company.”  

When asked if it would have been allowable for the Acadia transaction to go through, the registrar in St. Lucia wrote “that's a matter for the Jamaica authorities to respond to.” However, when trying to reach out to Jamaica’s National Land Agency (NLA), which is the local authority for property transactions, it didn’t respond.

The NLA falls under the Ministry of Economic Growth and Job Creation over which Mr. Holness presides as minister. Mr. Holness didn’t answer when asked how ADMAT was able to sell the Acadia apartment if ADMAT was struck off at that time. Mr. Bailey, the attorney who handled the transaction for ADMAT back then, recently said that he wasn’t aware that the company had been struck off in St. Lucia, and that the NLA only requires some of the time that a company shows it’s active before being allowed to deal in land transactions.

While trying to find the attorney for the buyers to ask a similar question, it was learned that she is now deceased. An attorney in Jamaica, who chose not to be named, said the 2016 Acadia transaction would have been considered void had ADMAT not been restored in 2021.

Transfer tax and stamp duty, the two most significant government cesses, were paid for each of the land transfers, according to the transfer documents. For the first of the properties sold in 2016 for $16.5 million - the Acadia apartment - $825,000 (US$6,593) in transfer tax was assessed and paid and $660,000 (US$5,274) in stamp duty, a total of $1.485 million (US$11,867).

The property transfer tax rate then was 5% of the sale price and 4% for stamp duty. When ADMAT was set up in February 2008 the prevailing rate was higher — 7.5% for transfer tax and 5.5% for stamp duty. (They began to be lowered under the Bruce Golding administration).

Had the February 2008 rates been around at the time of this 2016 sale, ADMAT would have had to have paid almost $1.7 million (US$13,515) in transfer tax and stamp duty. The seller is usually responsible for all the transfer tax and half of the stamp duty.

In 2019, the Holness-led administration fulfilled a campaign promise of his and lowered the property transfer tax rate even further to 2% from 5% and instituted a minimal flat fee for stamp duty. In an interview on the campaign trail during the February 2016 general election, then Opposition Leader Holness said that he would reduce transaction taxes as a way to increase the velocity of transactions to spur economic growth, particularly in areas like real estate and construction.

While the available statistics have shown that more value has been added to the economy from those areas since then, this policy decision would end up providing significant savings for Mr. Holness’ ADMAT INCORPORATED when it transferred its other Jamaican properties in 2021. For example, instead of paying $9 million (US$59,359) in transfer tax based on Jamaica’s February 2008 rate of 7.5%, assuming the year of sale and the sale value were the same, the transfer of the Shenstone Drive house from ADMAT to Imperium in November 2021 cost ADMAT only $2.4 million (US$15,829) in transfer tax, which is 2% of the government-assessed value of $120 million (US$791,452).

In stamp duty, ADMAT could have ended up paying $3.3 million (US$21,765) based on the vendor being responsible for half of the rate that was applicable in February 2008 of 5.5%. Instead, only $100.00 (US$0.66) was assessed for the whole transaction under the new regime. For the transfer of the property at Weycliffe Close to Estatebridge Development Limited in November 2021, only $760,000 (US$5,013) in transfer tax and $100.00 (US$0.66) in stamp duty ended up being assessed and paid on the valuation of $38 million (US$250,627) put forward by ADMAT that was accepted by the government.

Under the February 2008 regime, ADMAT would have been subject to a much higher amount for transfer tax and stamp duty together of about $3.9 million (US$25,689). Four townhomes are now being constructed on that property, which if they end up being sold, will also result in Estatebridge paying transfer tax and stamp duty at the lower rates.

Signing the transfer documents for ADMAT’s two Beverly Hills properties were Andrew Holness as Director and Adam Holness as Company Secretary “while on a visit to Jamaica.” Signing for Imperium Investments Holdings was Andrew Holness as Director and Donovan Williams as Company Secretary. For Estatebridge Development, it was Adam Holness, who signed as Director, and Donovan Williams, who signed as Company Secretary. 

Mr. Williams was also the attorney that handled both transactions and is a current member of parliament in Mr. Holness’ Jamaica Labour Party for the Kingston Central constituency. He’s also the brother of Delroy Williams, the outgoing mayor of Kingston.

The total amount that could have been assessed in transfer taxes and stamp duty for all three properties, around $17.9 million (US$120,328), may begin to paint a picture of how much money Mr. Holness and his family could have saved on Jamaican taxes if all ADMAT’s assets had been sold or transferred in one swoop while Mr. Holness was alive and before the lowering of the Jamaican transfer tax and stamp duty rates and before St. Lucia’s changes to its IBC law. That’s because with a St. Lucian IBC, its shares can pass to another person or entity without the title to the physical underlying assets being changed.

“So in that case there’s no transfer from one entity to another, so you save on transfer tax and stamp duty and those sorts of things,” Mr. Bailey, Mr. Holness’ then attorney, explained. (As a result of the recent changes, St. Lucia now has a stamp duty when passing the shares of an IBC to a beneficiary.)

In the interview with 18º North in 2016, Mr. Holness said he is a “small government, free enterprise person,” who believes that “markets work best,” and that “taxes are distortionary.” At the time, properties belonging to him and his wife or ADMAT had been listed as owing property taxes for several years, and it was only after 18º North brought it to Mr. Holness’ attention that they were paid.

(They were listed as owing again as of last week but only for the latest year.)