Panama leaks: David Cameron's father 'ran offshore fund that paid zero UK tax for 30 years'
David Cameron’s father was allegedly involved in hiring what has been called a small army of Bahamas residents – including a part-time bishop – to sign paperwork for an offshore fund in what may have been an effort to avoid paying UK tax.
Papers leaked from the Panama-based law firm Mossack Fonseca are said to suggest Ian Cameron was part of the scheme as a director of Blairmore Holdings Inc.
The investment fund was reportedly run from the Caribbean but named after Cameron family’s ancestral home in Aberdeenshire.
The fund, created in the early 1980s with the help of the prime minister’s late father, is believed to still exist today.
The Guardian, one of the 109 international media organisations given access to the massive tranche of data from Mossack Fonseca, has claimed that in 30 years Blairmore has never paid a penny of tax in the UK on its profits.
Blairmore’s 2006 investment prospectus also stated: "The directors intend that the affairs of the fund should be managed and conducted so that it does not become resident in the UK for UK taxation purposes. Accordingly... the fund will not be subject to UK corporation tax or income tax on its profits."
Asked to confirm whether David Cameron’s family still had any money invested in Blairmore Holdings Inc, the Prime Minister’s spokesperson said today it was “a private matter”.
HMRC has told The Independent it could not confirm whether or not the affairs of Blairmore Holdings would be investigated.
However, Jennie Granger HMRC’s director-general of enforcement and compliance has said that tax inspectors have asked the International Consortium of Investigative Journalists to share the leaked data with HMRC, and pledged to “closely examine this data”.
This means there is a possibility that Blairmore Holdings’ tax affairs could come under scrutiny.
Blairmore, incorporated in Panama but based in the Bahamas, appears to have been a longstanding customer of Mossack Fonseca, the law firm from whom 11.5 million documents have been leaked, referring to work stretching back nearly 40 years.
The leaked documents suggest Blairmore used up to 50 Bahamas residents a year.
They were allegedly used to sign paperwork and fill roles such as treasurer and secretary. Among them, according to the leaked documents, was the late Solomon Humes, a lay bishop with the non-denominational Church of God of Prophecy, who acted in various roles including vice-president over a number of years from the mid-1990s.
There is no suggestion that retaining Bahamas residents in this way was illegal. Other offshore funds also made similar arrangements. Clients of Blairmore may also have been using the fund simply to preserve their privacy.
Ian Cameron was one of five UK-based directors of Blairmore until shortly before his death in 2010. Six other directors from Switzerland and the Bahamas was recruited, meaning a majority of the board was foreign-based and the fund therefore had offshore status.
Board meetings were often held in the five-star Hotel Beau-Rivage in Geneva.
The Panama Papers suggest Blairmore’s European-based directors regularly flew to the Caribbean. There is said to be little reference to their Bahamas-based counterparts flying to meetings in Europe, which may raise questions about how involved in the fund’s decision making the Caribbean board members really were.
The leaked documents also suggest that until 2006 Blairmore was run using a financial instrument known as bearer shares. This was once a common arrangement in offshore funds. Like banknotes, bearer shares do not carry the name of the owner and are deemed to belong to whoever is holding (bearing) the certificate.
Bearer shares are entirely legal and there is no suggestion Blairmore ever used them for anything illegal. Bearer shares have, however, been abolished in some countries because they have allegedly been used by organised criminal gangs.
The Guardian reported that Blairmore’s bearer shares were kept securely locked and, according to the leaked documents, Ian Cameron had to count piles of the certificates to check none had been lost or stolen.
Minutes from 2001 also show Blairmore’s directors discussing the importance of monitoring news about Panama to “ensure that the jurisdiction is in keeping with the company’s pristine reputation”.
In 2006 Blairmore switched to using traditional shares, where owners are named in a register.
In 2015 David Cameron’s government banned bearer shares in the UK.
The Prime Minister has also called for an international crackdown on aggressive tax avoidance and evasion.
After viewing the leaked documents, Richard Brooks, a Private Eye journalist and former HMRC tax inspector, told the Guardian: “If HMRC had seen the papers they would have had some very serious questions. The clear intention for Blairmore was to avoid becoming UK tax resident and the test for this, even in 2006, is the location of the central management and control.
“This means where the key business decisions are taken. The evidence here suggests in this period they weren’t taken outside the UK, in which case it is hard to see how the company was not managed and controlled, and therefore tax resident, in the UK at the time.”
Clients of Blaimore are thought to have included Isidore Kerman, an adviser to Robert Maxwell who once owned the West End restaurants Scott’s and J Sheekey, and Leopold Joseph, a private bank used by the Rolling Stones. There is no suggestion that these clients signed up to the fund to avoid tax in any way.
The Prime Minister’s spokesperson said today he had responded to the allegations about his father’s tax affairs in the past. In 2012 Downing Street responded to revelations about Blairmore Holdings by declining to comment on a “private matter.”
Independent News Service