Donald Trump’s Scottish golf courses are expected to get a tax rebate of nearly £1m as part of a government bailout for tourism businesses hit by the coronavirus crisis, the Guardian can reveal.
The Trump Organization’s golf resorts in Aberdeenshire and Turnberry will benefit from emergency funding from the Scottish government worth £2.3bn, which includes waiving the property taxes paid by hospitality, leisure and retail businesses this year.
Before the coronavirus crisis, Trump Turnberry had been due to pay £850,766 in property tax this year and Trump Aberdeenshire £121,170. The Trump Turnberry’s tax bill was recently reduced to £770,845, upon appeal.
This week South Ayrshire, the local council which includes Turnberry, and Aberdeenshire council are expected to tell both businesses they no longer have to pay any of that tax, known as business rates, because they qualify for 100% relief.
Both resorts have been able to avoid paying corporation tax, the main business tax in the UK, because they consistently report heavy losses due to their debts to Trump himself, cumulatively put at £155m in 2018.
The revelation comes as some Democrats in the US Congress raise questions about whether it is lawful for Trump’s companies to accept any benefits from a foreign country, including bailout funds from the UK and Scottish governments.
The House oversight committee asked the Trump Organization to supply it with all documents related to the company’s applications for loans or other funds by 21 May. There is no evidence that the company has complied with the request.
One ethics expert in Washington stopped short of saying the property tax benefit represented an illegal gift under the emoluments clause of the US constitution – which was designed to block federal officials from receiving foreign payments – but said the tax rebate was nevertheless problematic.
The US Congress has passed legislation prohibiting US taxpayer funds from being used to benefit companies in which Trump holds a stake.
“It is troubling that he is getting essentially a benefit from the Scottish government, regardless whether it is an emolument. You shouldn’t have a president who is in this kind of position who can say: ‘I like what the UK did and I benefitted,’” said Noah Bookbinder, the executive director of Citizens for Responsibility and Ethics in Washington.
In Scotland, the Aberdeenshire councillor Martin Ford said he did not object to Trump’s businesses using a furlough scheme that allowed staff to continue to be paid, but criticised the business rates relief. “Taxpayer assistance for a business owned by someone who boasts he is a multi-billionaire is quite another matter,” Ford said.
“Unlike many people, Mr Trump won’t be suffering any financial hardship. He doesn’t need help. Mr Trump was given every assistance to set up in Scotland and the Scottish government repeated his ridiculous claims of an enormous economic and jobs boost for the region. Now, after years of losses, Mr Trump’s Aberdeenshire business is actually getting taxpayer support, perhaps a final irony in a very sorry saga.”
The ownership of the Trump Organization was shifted to a trust when Trump became president, but the businessman and former reality TV star has remained the majority owner of the trust and is expected to retain his position in the company once his term in the White House ends. “A benefit to the Trump Organization is in large part a benefit to Donald Trump,” Bookbinder said.
The Scottish and UK governments’ emergency funds include funding the furlough of any staff not able to work because their businesses have closed down and a £120m emergency fund for “pivotal enterprises”. Trump Turnberry said in 2018 it employed about 477 people a month; the Aberdeenshire course said it employed 77 employees on average across that year.
The pivotal enterprise resilience fund gives out tailored grants to firms seen as “vital to the local or national economic foundations of Scotland”, but companies have to pursue that funding and prove why they need it.
A Trump Organization executive in Scotland, Sarah Malone, confirmed they had used coronavirus emergency funding schemes but refused to provide details on how much they had claimed or how many staff they had furloughed. Malone did not deny, however, that the two golf resorts were due to receive the property tax relief.
“It is well known across the world that the tourism and hospitality industry has been dramatically affected by Covid-19. Almost all businesses within this sector have been unable to trade,” she said.
“Our priority throughout the mandatory closures has been the welfare of our staff and their families. The government schemes are designed to protect jobs and businesses affected by this worldwide crisis and to provide financial support to individuals unable to work. Most businesses across the UK, including those which have been able to continue to trade, have accessed the aid provided by the government.”
Trump Aberdeenshire announced on 24 March it had delayed reopening for the 2020 season because of the UK-wide coronavirus lockdown. Eric Trump, the president’s son, who runs his golfing empire, tweeted on 28 May that both resorts were reopening the following day.
This article was amended to include an updated property tax bill for Trump Turnberry.