LONDON – Following the Panama Papers leaks, Cameron has denied his and his family involvement in the tax evasion, “…there have been some deeply hurtful and profoundly untrue allegations made against my father.”
The published document has shown that Cameron currently holds no shares. The Prime Minister has also acknowledged that he previously hold the shares in Blairmore Holdings until he sold them in 2010. Cameron says that the fund was registered with the UK’s Inland Revenue with the profits being returned annually. He adds, “It wasn’t a family trust – it was a commercial investment fund for any investor to buy units in.”
According to the prospectus of BLAIRMORE HOLDINGS, INC. of 2006, “On the basis of section 694, paragraph 2 (c) of the Tax Code of the Republic of Panama, the fund is not liable to taxation on its income or capital gains as long as such income or capital gains are not derived from sources allocated within the territory of the Republic of Panama.”
However, the prospectus refers to the taxes to be paid for the UK residents. “Subject to their personal circumstances, Shareholders resident in the United Kingdom for taxation purposes will be liable to United Kingdom income tax or corporation tax in respect of dividends or other distributions of an income nature made by the Fund, whether or not such distributions are reinvested.”
According to Cameron, the reasons of the fund being set up abroad is that trading was operated using dollar units. The Prime Minister also mentioned that the investment in similar funds is relatively common practice which often involves the actors like “the pension funds of local government, most of Britain’s largest companies and indeed even some trade unions.”
Mossack Fonseca has also responded to media allegations. In it’s statement, the company has argued for the separation of the tax evasion from the tax avoidance, with the latter being regarded as legal. “We … do not offer solutions whose purpose is to hide unlawful acts such as tax evasion. … Moreover, it should be made clear that tax avoidance and evasion are not the same thing. For example, a client can use the structures provided by us for tax optimization of his/her estate, such as taking advantage of provisions in treaties for avoiding international double taxation. Such behaviour is perfectly legal.”
However, Panama leaks are about to bring more attention from the UK government and the public to the offshore companies. Cameron said that British Crown dependencies and British Overseas Territories had already agreed to expose taxpayer information automatically. Moreover, Prime Minister is intended to encourage the companies to publicise this information. The government is also intended to introduce the new legislation which will make the corporations legally responsible for their representatives’ tax evasion.
A funding of up to £10 million will be provided to analyse the information obtained from the Panama papers.
– Dimona Delvere, Correspondent (Europe)