This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/news/2016/apr/07/david-cameron-admits-he-profited-fathers-offshore-fund-panama-papers

The article has changed 9 times. There is an RSS feed of changes available.

Version 1 Version 2
David Cameron admits he profited from father's offshore fund David Cameron admits he profited from father's offshore fund
(35 minutes later)
David Cameron has admitted that he profited from his late father’s offshore investment fund, which was revealed in the Panama Papers as having avoided paying tax in the UK. David Cameron has finally admitted he benefitted from a Panama-based offshore trust set up by his late father.
The prime minister sold his stake in the Blairmore fund for more than £30,000 in 2010, just four months before entering Downing Street. Related: What David Cameron did and didn't say about his father's offshore trust
Speaking after almost a week of refusing to comment on the leak but issuing four statements, Cameron said he and his wife, Samantha, held 5,000 units in the Blairmore Investment Trust for three years from 1997. After three days of stalling and four partial statements issued by Downing Street he confessed that he owned shares in the tax haven fund which he sold for £31,500 just before becoming prime minister in 2010.
Related: Putin dismisses Panama Papers as an attempt to destabilise Russia In a specially arranged interview with ITV News’ Robert Peston he confirmed a direct link to his father’s UK-tax avoiding fund, details of which were exposed in the Panama Papers revelations in the Guardian this week.
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. Admitting “it has been a difficult few days”, the prime minister said he held the shares together with his wife, Samantha, from 1997 and during his time as leader of the opposition. They were sold in January 2010 for a profit of £19,000.
The prime minister insisted the family declared all annual dividends they received from the investment, and paid full income tax on any returns. He paid income tax on the dividends but there was no capital gains tax payable and he said he sold up before entering Downing Street “because I didn’t want anyone to say you have others agendas or vested interests”.
The revelation comes five days after the Tory leader’s father, Ian Cameron, was named in an unprecedented leak of more than 11m documents from Panamanian law firm Mossack Fonseca. But the interview appeared unlikely to end scrutiny of Cameron’s tax affairs.
The Panama Papers revealed how Ian Cameron ran an offshore fund that avoided ever having to pay tax in Britain by hiring a small army of Bahamas residents – including a part-time bishop – to sign its paperwork. Labour MP John Mann, a member of the Treasury select committee said he should resign and claimed Cameron had “covered up and misled”.
As a director of Blairmore Holdings Inc, an investment fund run from the Bahamas but named after the family’s ancestral home in Aberdeenshire, Ian Cameron oversaw tens of millions of pounds on behalf of wealthy families. Cameron also admitted he did not know whether the £300,000 he inherited from his father had benefitted from tax haven status as a result of the fact part of his estate was based in a unit trust in Jersey.
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. “I obviously can’t point to the source of every bit of money and Dad’s not around for me to ask the questions now,” Cameron said.
Documents released in the Panama Papers show how the firm used unregistered “bearer shares” to protect its clients’ privacy. Ian Cameron’s use of the firm to help shield investments from UK tax helped build up a significant legacy, part of which was inherited by the PM. Related: David Cameron's father sought legal advice on best tax havens
There is no suggestion that this avoidance arrangement or others exposed by the leak were illegal. It was the fifth explanation in four days that Cameron and his aides had given about about the benefits he and his family had enjoyed from the offshore fund. Downing Street initially insisted it was a private matter, but Cameron then said he had “no shares, no offshore trusts, no offshore funds”. His spokesman later clarified: “The prime minister, his wife and their children do not benefit from any offshore funds.” Downing Street then said there were no offshore funds or trusts they would benefit from “in future”, leaving questions about the past.
Related: If you're rich, you can avoid paying taxes. That's got to change | Jan Schakowsky In his first interview on the topic after days of stonewalling, he was questioned on whether there was a conflict of interest between his father setting up the Panama-based Blairmore Investment Trust, which did not have to pay UK tax on its profits, and his professed policy to crack down on aggressive tax avoidance.
In an interview with ITV’s political editor, Robert Peston, on Thursday evening, the prime minister defended his father’s involvement in the fund. “Rules have changed, culture has changed,” he said. “And I welcome that.”
“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, I’m proud of my dad and what he did and the business he established and all the rest of it,” Cameron said. “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,” he said.
“I can’t bear to see his name being dragged through the mud. I chose to take a different path from my father, grandfather and great-grandfather, who were all stockbrokers, and I’ve got nothing to hide in my arrangements and I’m very happy to answer questions about it.” Earlier Cameron had refused to take questions from the press while campaigning in Exeter for Britain to stay in the EU. A student managed to ask him: “I am very interested in what the collective EU states could do to combat tax avoidance – something you have personal experience of.”
Cameron also rejected suggestions that the fund was created to shelter investors from tax. He said: “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. Speaking about his personal wealth, Cameron told Peston: “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.
“It was set up after exchange controls went so that people who wanted to invest in dollar denominated shares and companies could do so.” “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.”
He also said it was a “misconception” that Blairmore was set up to avoid tax. “It wasn’t,” he said. “It was set up after exchange controls went so that people who wanted to invest in dollar denominated shares and companies could do so.”
Related: David Cameron avoids question on benefiting from father’s tax affairs
Richard Burgon, Labour’s shadow Treasury minister, said Cameron’s admission showed a “crisis of morals” at the heart of the Conservative government.
“After four days of refusing to answer this question David Cameron has now finally been forced to admit he directly benefited from Blairmore - a company which paid no tax in 30 years,” he said.
“He must now further clarify whether or not he or his family were benefiting directly or indirectly in 2013 when he was lobbying to prevent EU measures to better regulate trusts as a way to clamp down on tax avoidance.
“David Cameron needs to properly put the record straight in full on this matter and issue a statement to parliament on Monday. We can’t let this crisis of morals at the heart of the Conservative government further undermine public trust in the office of prime minister or the principle that those who govern us should pay their tax like the rest of us.”
The Panama Papers were leaked to the German daily Süddeutsche Zeitung, which shared them with the Washington-based International Consortium of Investigative Journalists, the Guardian, the BBC and other media organisations. Four days into the torrent of revelations, regulators stepped up their response.
20 banks and financial firms in London have been told to disclose their dealings with Mosack Fonseca to the UK’s Financial Conduct Authority by Friday next week in a first step that could potentially see wrongdoing punished with heavy fines. It cited the need for financial institutions “to mitigate the risk that they might be used to commit financial crime”.
In Geneva, Swiss chief prosecutor, Olivier Jornot, said he had launched an undisclosed number of investigations and said his office was paying “very close attention” to new information as it emerged.
In Brussels, the EU tax commissioner, Pierre Moscovici, threatened “to hit [tax havens] with appropriate sanctions if they refuse to change”.
“The amounts of money, the jurisdictions and the names associated with this affair are frankly shocking,” he said. “If these leaks reveal that any EU laws have been broken, the commission will not hesitate to act.”
The Russian president, Vladimir Putin, dismissed revelations about a network of offshore deals worth $2bn involving members of his close circle as a conspiracy to undermine Russia.
Responding for the first time, he claimed the reports were “one more attempt to destabilise the internal situation [and] make us more accommodating”.
“Your humble servant was not there [named in the files], but they don’t talk about that,” he said in St Petersburg. “So what did they do? They make an information product – they found acquaintances and friends.”
China meanwhile stepped up its efforts to stop its population reading revelations that showed relations of three of the seven members of the Communist party’s elite ruling council, including relatives of the president, Xi Jinping, had companies that were clients of Mossack Fonseca. The Guardian’s coverage of the Panama papers was blocked to internet users not on a special secure network. The Communist party reportedly told news organisations to “self-inspect and delete all content related to the ‘Panama Papers’ leak”.
It was announced that the Argentinian president, Mauricio Macri, was facing an investigation into his financial dealings via two offshore firms that appeared in the files. The federal prosecutor, Federico Delgado, opened an investigation to find out if Macri, who denies wrongdoing, failed to declare assets as required by public officials.