Offshore fund is offshore

Now there\’s a surprise, eh?

David Cameron\’s father built up legal offshore funds in Panama and Geneva

Blimey.

That anyone and everyone resident in the UK would have to pay tax on what they received from the funds is noted. In which case, what\’s the damn problem?

Peeps in UK pay UK tax. Hurrah!

10 thoughts on “Offshore fund is offshore”

  1. “Though entirely legal, the funds were set up in tax havens such as Panama City and Geneva, and explicitly boasted of their ability to remain outside UK tax jurisdiction.”

    I’m assuming that if the funds were based in any country outside of the UK then they would remain outside UK tax jurisdiction. An odd article but panders well to Guardian reader prejudice.

  2. It’s legal in the same way that Ken Livingstone’s tax affairs were legal: 100% within the law, pays a bit less tax, but not the way most people do it.

    At the very least they’re avoiding stamp duty.

  3. These schemes were a sound idea – you only paid tax when you cashed in and therefore had some cash with which to pay it, so the funds could make long-term investments – i.e the ones beloved of economists and capitalists alike that involve investing now to get returns in the medium-distance future rather than today. Funds which had to pay tax each year on notional profits are constrained by the need to find cash each year and so cannot invest 100% for the long term. Ian Cameron and the highly respected firms (Close and Smith & Williamson are mentioned) deserve credit.
    This structure would, and under the Conservatives actually did, involve paying *more* tax in the long run.
    The trouble is that under New Labour it paid far less tax because Brown reduced the CGT rate when abolishing indexation so that he could tax notional gains when the investor had made a real loss.
    The trouble is with Brown, not Ian Cameron.

  4. Unusually for a Guardian article it is not open for readers comments.

    A cynic might suspect that the Guardian editor’s do not want people pointing out the Guardian’s own tax avoidance scheme via the Cayman Islands.

  5. I see Ritchie is joining in – accusing DC of hypocrisy blah blah, whilst failing to notice the irony of the Guardian’s offshore tax position and his own past history.

    Even Chris Bryant is saying that attacking DC for his late father’s entirely legal tax arrangements is out of order.

  6. “under New Labour it paid far less tax because Brown reduced the CGT rate”

    But don’t you have to pay income tax on gains from the sale of offshore non-distributing funds?

    That was a Nigel Lawson reform, I think, before he made it largely irrelevant by harmonising the IT and CGT rates.

  7. Andrew M is right on this. Ken Livingstone’s tax arrangements only came under fire because he attacked tax avoidance by “the rich”. The accusation against him was hypocrisy, not tax avoidance, but Mr Cameron has jumped on the anti-tax-avoidance bandwagon and spent most of last week’s Prime Minister’s Questions attacking Ken Livingstone for “not paying his taxes”. He is therefore open to the same accusation. It is not, or should not be, a criticism of his father.

  8. @ Richard
    Easy to avoid by buying a UK fund or shares in a UK company which invests, inter alia, in the offshore fund and selling the UK fund or shares. As long as you have the “inter alia” HMRC cannot look through to the offshore fund and tax you on that.

  9. but Mr Cameron has jumped on the anti-tax-avoidance bandwagon and spent most of last week’s Prime Minister’s Questions attacking Ken Livingstone for “not paying his taxes”. He is therefore open to the same accusation.

    Which would have been a perfectly valid comment. If, and only if, it was David Cameron who had done the tax avoiding.

    But it wasn’t. It was his father. Nobody is attacking Livingstone for his father’s legal activities. Hell, my father has been known to vote Liberal Democrat. Shudders.

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