B&M management domicile the discount chain in Luxembourg

The decision to tax domicile in Luxembourg, known for its low corporate taxes, could raise eyebrows, following controversies about other businesses that have adopted a similar practice.

Chairman Sir Terry Leahy has placed his investment in the firm through a fund registered in tax haven the Cayman Islands, it has emerged.

B&M, which sells products ranging from lamps, trampolines and board games, floated last week, putting the founders – brothers Simon, Robin and Bobby Arora – in line for a £1bn windfall.

According to the prospectus, ‘the company is a fully taxable company resident for tax purposes in Luxembourg’, the Daily Mail reported. It added that B&M paid £6.9m in ‘income tax expenses’ on sales of £1.2bn for 2014.

The Daily Mail reported Leahy is a senior advisor to US private equity firm Clayton Dubilier & Rice (CDR) which owns 60% of B&M, and has connections to the Cayman Islands.

B&M’s prospectus said: ‘Sir Terry Leahy has an interest in the shares held through CD&R Holdco as a result of his interest in CD&R Fund VIII.’

The prospectus said that CD&R Holdco, also referred to as CD&R European Value Retail Investment, is ‘a Cayman Islands limited partnership owned by the CD&R Investors, which is managed by CD&R’.