Cameron has released his tax returns for the last six years. Wisely his inheritance was split into £300,000 from his father and a £200,000 gift from his mother in 2011, tax planning which will ultimately save him £70,000 in inheritance tax if his mother survives 7 years from the gift. Though Osborne’s pre-election Budget mockery of Miliband for “avoidance of inheritance tax” looks rich now…
Ken Livingstone has gone on Russia Today to call for Cameron to be jailed over his taxes. That is the same Ken Livingstone who sheltered his earnings in a company so he could save £1,000-a-week in tax. Ken paid 21% corporation tax rate on £319,478 of earnings by invoicing to Silveta Ltd, instead of paying the 50% top rate of income tax. He also owned 99% of a similar company twice prosecuted for non-payment of taxes. Ken’s effective tax rate in 2012 was 14.5%. Today he laughably calls Cameron “the most hypocritical prime minister of my lifetime”…
Today brings some of the worst front pages for David Cameron since be became PM, as Labour MPs hysterically call for him to resign. Could Dave’s £30,000 in an offshore trust be fatal?
Cameron is responsible for the situation, not his father, because he bought the Blairmore shares himself in 2007. Though it is worth remembering there is nothing wrong with investing in a foreign fund. Crucially – and wisely – he sold the shares in 2010. If he still owned shares in a Panama trust while PM he would be under a lot more pressure…
Did Cameron actually avoid any tax? He insists he didn’t, and several top journalists and tax experts agree Blairmore was not a tax avoidance scheme. There is currently no dispute that Cameron paid all the UK taxes on his income from his shares. If Cameron had avoided tax by hiding assets offshore, the situation would be very different…
And what about the attack line Labour MPs are clamouring around, that Dave did not declare his Blairmore shares in his 2009 Register of Members Interests? MPs are not required to declare shareholdings in unit trusts, holdings below £70,000 or 15% of a partnership:
So this is a blind alley for Labour. Cameron was not the beneficiary of an offshore trust while PM, he appears not to have avoided any tax, and he did not breach parliamentary rules. If any of these points change, then his position becomes a lot less tenable…
He tells Peston he and SamCam did own a stake in his father’s Panama trust, which he sold for £30,000 in 2010:
“We owned 5,000 units in Blairmore Investment Trust, which we sold in January 2010. That was worth something like £30,000.
I paid income tax on the dividends. There was a profit on it but it was less than the capital gains tax allowance so I didn’t pay capital gains tax. But it was subject to all the UK taxes in all the normal way.
I want to be as clear as I can about the past, about the present, about the future, because frankly I don’t have anything to hide.
[On his £300,000 inheritance] I obviously can’t point to every source of every bit of the money and dad’s not around for me to ask the questions now.
In all of this I’ve never hidden the fact that I’m a very lucky person who had wealthy parents, who gave me a great upbringing, who paid for me to go to an amazing school. I have never tried to pretend to be anything I am not.
But I was keen in 2010 to sell everything – shares, all the rest of it – so I can be very transparent. I don’t own any part of any company or any investment trust or anything else like that.”
So the PM doesn’t know if he received offshore money in his inheritance, though he insists Blairmore was not set up to avoid tax:
“It wasn’t. It was set up after exchange controls went so that people who wanted to invest in dollar denominated shares and companies could do so. There are many other unit trusts like it, and I think it’s being unfairly described and my father’s name is being unfairly written about.”
There is of course nothing wrong in investing in a foreign fund, Cameron paid full UK taxes and sold the stake before be became PM. But as for the Downing Street news management, oh dear…
Labour MPs are not pulling punches on the tax affairs of David Cameron’s father, calling him “absolutely disgusting” despite there still being some dispute over the extent of any tax avoidance that actually took place. What do they have to say about another prominent politician’s father and his tax affairs?
When Tony Benn’s wife died, he took steps to immediately pass his assets onto his children to reduce their eventual inheritance tax burden. The kids reportedly took part ownership of the family home in Holland Park, which was then quickly sold for £4.1 million. He also placed Stansgate House and its estate in trust, another nifty inheritance tax avoidance measure. Hilary Benn and his siblings directed benefited from his father’s careful tax planning. No wonder the Shadow Foreign Secretary has yet to comment on Dave’s predicament…
In Labour’s new Party Political Broadcast Art Malik rails against tax avoidance, claiming “the government squeezes the less well off while letting the richest avoid paying the taxes that the rest of us do”. Malik is the director of a company called ML&J Ltd. The firm, which claims to engage in “motion picture production activities”, employs as its company secretary one Gina Malik, Art’s wife. A textbook little trick used by hundreds of actors, musicians and entertainers.
ML&J Ltd is registered to 24 Bedford Row, London. Coincidentally, that is also the address of its accountants, Mehta & Tengra. On their website Mehta & Tengra do not disguise how they help their clients’ companies avoid tax:
“Our accountants can conduct a review of your firm to determine areas where they can reduce your corporate tax exposure with an efficient strategy… forward planning can ensure compliance and result in considerable tax savings.”
Not only that, Mehta & Tengra even offer specialist “offshore tax planning” services.
Labour’s new crusader against tax avoidance owns a company that employs his wife and is registered to the address of his accountant specialising in aggressive tax avoidance…
The Icelandic PM…
Faisal Islam: The leader of the opposition has called for an investigation into your tax affairs for your own interests. Can you clarify for the record that you and your family have not derived any benefit in the past and will not in the future from the offshore Blairmore Holdings fund mentioned in the Panama Papers?
This is a pretty brave attack line from John McDonnell over Tory party donors who may have avoided tax:
“Is the Prime Minister happy to receive money from big donors who are accused of tax avoidance?”
Especially when you consider that Labour’s biggest donor Unite paid no corporation tax in 2011 and 2012, despite earning £5.78 million from their £51.6 million investment portfolio.[…]
The news that David Cameron’s father ran an offshore fund which avoided paying UK tax is not new – four years ago the Guardian published an almost identical story revealing the existence of the “entirely legal network of offshore investment funds set up in tax havens such as Panama City”.[…]
The EU-enforced tampon tax causing a cross-party rebellion isn’t the only example of Brussels stealth tax imposed in this Budget. Following a decision by the Court of Justice of the EU in June last year, the 20% VAT rate was also forced upon “energy saving materials”, previously taxed at just 5%. […]
Former Olympic rower James Cracknell, the thinking man’s Sol Campbell, has put his name to a new Policy Exchange report calling for a tax on sugary drinks. Cracknell, PX’s “Senior Research Fellow for Obesity and Physical Activity”, praises Mexico’s tax on sugar-sweetened drinks which caused purchases to fall by 12%, concluding:
“The human misery and drain on the public finances is so great that the government has no option but to intervene… [a sugary drinks tax] is on balance a sensible intervention to help prevent the rise in obesity”
Ironically this nannying tax would hit Cracknell himself.[…]