UK owner of Speedo shifts its tax domicile to Ireland in €6bn move

Pentland Group, the British owner of sports brands Speedo and Lacoste and the majority owner of stock market-listed retailer JD Sports, has shifted its tax domicile to Ireland. A new Irish group company set up to facilitate the deal has been allotted shares in the business valued at £5.13 billion (€6bn).

Family-controlled Pentland says it has made the move to “benefit from the European Union’s freedoms and regulatory environment” after Brexit. Its trading businesses remain in the UK where they are liable for tax on their operations, and Pentland is suggesting the move “does not save us any tax”.

The two Irish-based directors of the new Irish structure, John Kelly and Enda Faughnan, are both former tax partners at PriceWaterhouse Coopers (PwC) in Dublin.

The annual report in the UK of Pentland Group lays out some of the details of the complicated restructuring, which was executed towards the end of 2019. A new holding structure – Pentland Group Holdings Limited (PGHL) – was registered in Jersey but is "tax resident in Ireland", the company says.

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Filings in the Companies Registration Office here show that at around the same time the Jersey company was set up, an intermediate company was established in Dublin, Pentland Industries International DAC. The filing says the Irish company allotted shares to another group company in exchange for shares in a UK group trading business. The filings specify a value on those shares of £5.13 billion.

Several members of the Rubin family that controls Pentland are directors of the Irish business alongside the two Irish former PwC partners. Mr Kelly’s LinkedIn entry suggests he is also a director of PGHL, the new Jersey-registered ultimate parent entity. Mr Kelly was chief operating officer of PwC’s global tax division in Dublin, but he left in 2017 after 43 years with the firm.

Mr Faughnan's LinkedIn says he spent over 30 years with the firm and was head of tax at PwC Ireland for 10 years. His Linkedin entry also says he spent "10 years with Irish Revenue".

Three decades

Pentland has opened and shut a range of Irish companies over the last three decades. Its current trading interests in Ireland include JD Sports, which has more than 20 outlets, and Kukri Sports, a manufacturer based in Lisburn, Co Antrim.

Pentland is a 90-year old business with its roots in a Liverpool shoe manufacturer, and has been owned by the Rubin family ever since. Its current chairman is Stephen Rubin, the founders' son, who in 2019 was said by the Sunday Times to have the biggest individual tax bill in the UK – £181.6 million.

In addition to its stake of more than 50 per cent in listed JD Sports, it owns a wide portfolio of sorts brands, such as Ellesse and Mitre, which is synonymous with football boots. “Having a parent company in Ireland does not save us any tax as all of our UK day-to-day trading activities will remain in the UK subject to UK tax,” the company said on Monday.