Huge leak exposes elite's tax havens

[DJ Barry Hammond]

Woah hang on a minute Ken.  Are you implying that the poor also bedn the rules a little?  Jesus.

 

Also, for someone not interested in money you spend a whole lot of time talking about it.

 

And no, having offshore investments is not the same as fraudulently claiming benefits you are not entitled to.

It's the same type of mindset - protectionist!

[Dodgy Bob]

If the investment fund was mainly run from the small island in question... traded in the related currency, benefited the local population to some degree etc, etc, etc - then no, there's nothing morally wrong.

But to setup your company in a little known, little visited island, simply to enjoy the tax status etc - there's something that doesn't sit quiet right with me and I'd be disapointed if the majority didn't feel this way.

Ok, it could be viewed as sensible to protect family wealth as much as possible and has been accepted by some as what rich people do... but those are excuses, not reasons why it's morally right to do it.

It's not too different from diving in football no?

I guess my view would be that if your business success, ie your profit, is reliant in a significant way on the stability of a country's society and success of its economy then you're definitely morally obliged to pay your fair share of the costs towards maintaining that situation. So Amazon, who are reliant on their host country in numerous ways from tax payer funded roads to a supply of wealthy consumers, should definitely pay their fair share of tax. But an investment fund doesn't necessarily benefit from any publicly funded infrastructure or domestic wealth, and it might not even have any UK employees. For a business like that which can operate independently from any host country, I think the lines of morality are not easy to draw.

[Webbo]

In as much that I am cynical of the honesty and integrity of any politician, yes.

But just because he's a Tory? No. You're judging me by your own standards. There isn't another poster on here who blindy toes the party line like you do, and I'm not the only one to have pointed that out to you.

No offence intended.

In that case I apologise, I assumed when you said all Tories were psychopaths that you tended to think the worse of them.

[DJ Barry Hammond]

I guess my view would be that if your business success, ie your profit, is reliant in a significant way on the stability of a country's society and success of its economy then you're definitely morally obliged to pay your fair share of the costs towards maintaining that situation. So Amazon, who are reliant on their host country in numerous ways from tax payer funded roads to a supply of wealthy consumers, should definitely pay their fair share of tax. But an investment fund doesn't necessarily benefit from any publicly funded infrastructure or domestic wealth, and it might not even have any UK employees. For a business like that which can operate independently from any host country, I think the lines of morality are not easy to draw.

What is the country of origin for the money being invested? Is there any reason that many has to be moved to another juristriction (other than to avoid tax)? Do the investments within the trust benefit from the stability of a recognised nation(s) from which you are avoiding tax?

[Jon the Hat]

Insight from Peston

 

The Camerons could not have avoided income tax through Blairmore

Peston's Politics Robert Peston

The nature of the tax avoidance carried out by Blairmore Holdings, the investment company where David Cameron's father Ian was a director, may have been misunderstood.

<img alt="Ian Cameron, right, was a director of Blairmore Holdings" src="http://news.images.itv.com/image/file/946301/article_update_img.jpg"/>

Ian Cameron, right, was a director of Blairmore Holdings Credit: PA

There is a widespread presumption, I think, that the incorporation of Blairmore in Panama, and its location for operating purposes in the Bahamas, somehow meant that its shareholders - including members of the Cameron family - were protected from paying income tax and capital gains tax.

But Blairmore's 2006 prospectus is explicit that this is not so.

Its British investors were and are liable to income tax on the dividends they receive and capital gains tax on whatever profits they earn when they sell their Blairmore shares (and as far as I can tell they would have been lucky to make profits, since the performance of this small £21m fund has been anything but stellar).

So any Cameron who received income or capital from Blairmore should have paid tax on it.

{C} <img alt="Mossack Fonseca" src="http://news.images.itv.com/image/file/946307/article_update_img.jpg"/>

Questions over Blairmore arose out of the Panama Papers leaks of emails from law firm Mossack Fonseca Credit: PA

That said, Blairmore's offshore status does reduce - probably to zero - the tax liabilities of Blairmore itself.

Any profits it makes from its investments are not subject to corporation or income tax.

Which many of you may see as scandalous.

But it is worth making three points:

As a company incorporated in Panama, the tax would go to the Panamanian taxman - which would do naff all good to our deficit (and Panama as a point of principle doesn't want the tax).

Second, the less tax Blairmore pays in Panama, the bigger the dividends it can in theory pay to investors in Britain - who should therefore pay commensurately more tax in the UK.

And finally, Blairmore's Panama/Bahamas structure - which latterly became a Panama/Dublin structure - is spectacularly conventional.

<img alt="Any income David Cameron received from Blairmore should have been taxed" src="http://news.images.itv.com/image/file/946303/article_update_img.jpg"/>

Any income David Cameron received from Blairmore should have been taxed Credit: PA

There are thousands and thousands of investment funds with near identical offshore structures.

I can think of loads of hedge funds, private equity funds and international investment funds with incredibly similar offshore identities.

They are so common that I would be staggered if there were not Labour MPs - among others - who had not at some juncture held investments in funds with similar offshore structures, though they might not have been aware of it.

None of which is to argue that we should approve of the likes of Blairmore legally dodging taxes.

But it is to point out that Blairmore's tax avoidance does not in and of itself prove that Ian Cameron and his family avoided tax.

UPDATE

So for the avoidance of doubt, what I am saying is that the Blairmore furore shines a light on the extraordinarily high incidence of the use of offshore arrangements by businesses to avoid tax.

Most would say that is a noxious phenomenon.

And given David Cameron's public stand against such tax avoidance, it is embarrassing for him that his late dad employed such techniques at the investment fund he founded.

But Blairmore itself does not appear to have been a vehicle designed to reduce the personal tax bill of the Camerons.

Last updated Thu 7 Apr 2016

[Buce]

Cameron admits he did profit from his father's offshore fund:

http://www.theguardian.com/news/2016/apr/07/david-cameron-admits-he-profited-fathers-offshore-fund-panama-papers

[Webbo]

 “I think a lot of the criticisms are based on a fundamental misconception, which is that Blairmore Investment, a unit trust, was set up with the idea of avoiding 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.”

[Alf Bentley]

Guardian:

- "The company was founded in the 1980s and moved to Ireland in 2012, two years after David became prime minister. In its 30-year history, Blairmore has never paid a penny of tax in the UK on its profits". Nice!

- "The stake was purchased for £12,497 and sold for £31,500 in January 2010, giving the Camerons a £19,003 profit, £300 below the capital gains tax allowance". Convenient!

 

Mail:

- "After his [father's] death, the net value of his estate was put at £2.7million. He left £300,000 in cash – just under the threshold at which inheritance tax is paid – to David". Nicely avoided!

- "Legal sources said the terms of the will meant any Jersey assets were most likely to have gone to Mrs Cameron. Downing Street’s final statement yesterday said the Prime Minister and his family will not benefit in the future from any offshore funds. But tax experts said funds held in Jersey would have grown more quickly, as dividend payments would not have been subject to tax. If Mr Cameron inherits anything from his mother it could then be argued that he has benefited from the offshore Jersey assets. ‘If this happens it will be difficult to reconcile this with the Prime Minister’s statement." Tricky, but might have all blown over by then!   

 

[Webbo]

I still don't see what he's done wrong, inheriting money from your father isn't a crime. He had some shares but he sold them before he became PM. £19,000 isn't a fortune anyway.

 

It's all nudge nudge, wink wink, he must have been up to something crooked.

[Sharpe's Fox]

I not clued up when it comes to economics but am I right in saying in putting Blairmore offshore they, as a company, pay no tax on its profits and then the dividends the directors are given when the profits of Blairmore are sliced up tax is taken as a chunk of those dividends?

So say Blairmore were registered in the UK and made £100,000 in profit and 20% Corporation tax would be taken off which is £20,000.

That leaves a profit of £80,000 to be sliced up in dividends to directors, for simplicity there are four.

Each director gets £20,000 in a dividend, and a higher band of income tax is 45% so £9,000 each is taken to HMRC.

So adding it all up the tax man gets £20,000 corporation tax and £36,000 of income tax, so he gets £56,000.

And if the company is in Panama there is no corporation tax and the income tax is 45% on a dividend of £25,000 each, so £11,250 of tax is paid for each director. The tax men then gets a total of £45,000.

So that would mean Blairmore would pay £11,000 less tax than it should if it were in the UK in my shitty and probably completely wrong example?

[Webbo]

I not clued up when it comes to economics but am I right in saying in putting Blairmore offshore they, as a company, pay no tax on its profits and then the dividends the directors are given when the profits of Blairmore are sliced up tax is taken as a chunk of those dividends?

So say Blairmore were registered in the UK and made £100,000 in profit and 20% Corporation tax would be taken off which is £20,000.

That leaves a profit of £80,000 to be sliced up in dividends to directors, for simplicity there are four.

Each director gets £20,000 in a dividend, and a higher band of income tax is 45% so £9,000 each is taken to HMRC.

So adding it all up the tax man gets £20,000 corporation tax and £36,000 of income tax, so he gets £56,000.

And if the company is in Panama there is no corporation tax and the income tax is 45% on a dividend of £25,000 each, so £11,250 of tax is paid for each director. The tax men then gets a total of £45,000.

So that would mean Blairmore would pay £11,000 less tax than it should if it were in the UK in my shitty and probably completely wrong example?

I'm not an accountant but I can't fault your maths.

[DJ Barry Hammond]

Sharpe's... If I remember rightly, there was a loop hole concerning the tax treatment for the payment of dividends at one time in the not too distant future - which was why a lot of small business people paid themselves in dividends rather than an actual salary for a while, so the 45% figure you've quoted as income tax payable is unlikely to be a realistic figure.

[DJ Barry Hammond]

http://www.ocra.com/services/offshore_trusts01.asp

Thought this was a good explanation of "why" someone would setup an offshore trust. Clearly, given the cost of setting these things up we are talking about people with mega assets.

Now as far as I understand, what Cameron's dad has been found out for is being part of the setting up party for an overseas trust and the further admissions for Dave this afternoon reveal he and his wife were smaller investors of this trust.

But what I think the press are missing are this was no doubt part of Cameron Snr's job for many years as he worked in the city - so I expect he's been a part of setting up many more of these vehicles (whether named or not) and helped 100's / 1000's of very rich people to invest sums overseas.

They are focusing on 'potential personal gain' without realising that what's more hypocritical is that Dave's been saying how awful these tax avoiders are despite the fact his dad was actively encouraging people to do just that!

[Sharpe's Fox]

Thanks DJ, anyway from what I've seen while Davey sold the shares before he became PM but didn't before he became an MP as well as trying to lobby the EU to cover hair up and as such he should resign due to a conflict of interest. So should any other MP who may be revealed to be in similar circumstances.

[DJ Barry Hammond]

Shapre's - it's not a resigning issue, at least as yet, there's not enough in this. As it stands, all he's guilty of is investing in a trust that's based overseas and given there's loads of financial service companies based here that offer this service to wealthy people and its legal to do this, there's not too much incriminating here.

He could also turn this position into a strength in arguing / leading for tighter regulation and closing down loop holes because he can say he's "learnt the tricks of the trade from my dad" (probably in private circles).

But these stories are in their early days - journalists who I don't think really know what they're looking at are seeing a stack load of names in a mass of data (which has been given to them on a "you should have a look at this basis") and have just been firing pot shots in the hope more develops.

They haven't done badly so far, causing a bit of commotion here and a major resignation in Iceland, but I'm sure something bigger will come from a slower, more out in the open subsequent investigation.

[Rincewind]

May not be a resigning issue but it is embarrassing for Cameron after denying he profited. A man in his position can easily lose credibility.

Just  a thought. he and others  may have been within the law and limits,  but who sets the limits?

I  am talking about cross part's here. If there was a debate that could affect their way of life is it not reasonable to assume that there will be a bigger turnout? I am sure there are a few Labour MP's that have interests  and investments abroad as well as many HOL members. Can they be blamed for looking out for themselves?

I am sure a few on this forum would do the same  if MP's.

It is in human nature to look after yourself and close family first.

[DJ Barry Hammond]

So Dave's provided a summary (via his accountant) of his previous years tax returns this evening.

https://www.gov.uk/government/publications/prime-ministers-schedule-of-taxable-sources-of-income-and-gains

Note sure what I make of this. To me, it feels like there's something missing from the picture.

[Rincewind]

So Dave's provided a summary (via his accountant) of his previous years tax returns this evening.

https://www.gov.uk/government/publications/prime-ministers-schedule-of-taxable-sources-of-income-and-gains

Note sure what I make of this. To me, it feels like there's something missing from the picture.

Noughts?

[Benji]

Noughts?

 

 

 

Agreed, should be paid a lot more.

[Rincewind]

You have to  at it all or you'd go   as 

 

https://www.facebook.com/Channel4News/videos/10153670219421939/

[Benji]

You have to  at it all or you'd go   as 

 

https://www.facebook.com/Channel4News/videos/10153670219421939/

 

 

I'm going to bite.  What has got you so angry?  Have a listen to this and don't worry about the predictable response questioning his integrity or motives.  There's a longer video of James talking to BBC's Naga Munchetty somewhere.

 

http://www.bbc.co.uk/programmes/p03qdlwc

 

There are plenty of Tory policies around for people to get outraged at, this is just getting outraged for the sake of being outraged.

[Rincewind]

is mad as in crazy.

Just trying to lighten the mood.

[Webbo]

So Dave's provided a summary (via his accountant) of his previous years tax returns this evening.

https://www.gov.uk/government/publications/prime-ministers-schedule-of-taxable-sources-of-income-and-gains

Note sure what I make of this. To me, it feels like there's something missing from the picture.

Well if you feel there's something missing we ought to lock him up now.

[DJ Barry Hammond]

Agreed, should be paid a lot more.

That was one thing I thought, yes... but the other suprise for me is the relative lack of outside income (from investments and the like) given how little he is making?

[Thracian]

People using every legal means to make the most of their money! Wow, can't imagine anyone from Labour doing that!

 

But they may have benefitted from costly advice, just in case... http://www.telegraph.co.uk/news/politics/9121141/Labour-team-offered-free-advice-from-top-accountants.html.  

 

Milliband noticed tax havens exist - and said he'd do something about them. He didn't get chance of course, but his predecessors Gordon Brown and Tony Blair did, with their achievements in this direction, while actually holding the reins of power,  being mentioned in the last paragraph of the link below!   

 

 http://www.independent.co.uk/news/uk/politics/ed-miliband-tells-tax-havens-labour-would-force-them-to-expose-companies-or-be-blacklisted-10030676.html

 

Of course the issue needs cleaning up -and has done for years - but the hypocritical  furore is as much about the politics of envy as any great moral crusade!

 

Incidentally, I wonder if the Brinks Mat robbers were Labour or Conservative! .http://www.rocketnews.com/2016/04/brinks-mat-link-to-panama-law-firm/