David Cameron Hit by Panama Papers StormNewsletter European

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David Cameron Hit by Panama Papers Storm

Economy 8 April 2016 , by Newsletter European

The Panama Papers storm has reached the UK and has hit the Prime Minister’s family. The investigation led by the International Consortium of Investigative Journalists (ICIJ) about the secret financial dealings of Mossack Fonseca, world’s fourth-largest offshore firm, has unleashed an ever-widening scandal, involving hundreds of rich and powerful personalities all over the world.

For more information on the Panama Papers, read “Panama Papers: Commissioner Pierre Moscovici outraged and furious“.

So far on the defensive over his family’s offshore activities, the British Prime Minister, David Cameron admitted that he and his wife owned shares in an offshore trust run by his father Ian.

Cameron’s father, who died in 2010, contributed to the creation and development of Blairmore Holdings Inc. in Panama in 1982 and was involved in the investment fund until his death. This fund is not liable to taxation on both its income and capital gains and it is exempted from United Kingdom corporation tax or income tax on its profits.

“Samantha and I have a joint account. We owned 5000 units in Blairmore Investment Trust, which we sold in January 2010. That was worth something like £30,000. I paid income tax on the dividends”, he said to ITV News on Thursday. He added that, four months before he became prime minister in 2010, he sold the stake in the Bahamas-based trust.

Even if offshore trusts are not illegal under UK law, this revelation is a source of embarrassment to the PM who has already described complex tax avoidance schemes as “morally wrong.”

But the scandal does not concern uniquely the Prime Minister Cameron, as the 11,5 million documents leaked to the German newspaper Süddeutsche Zeitung show how three Conservative Members of Parliament and six members of the House of Lords are linked to the Mossack Fonseca activities. They also reveal the huge role played by British overseas territories that indirectly offered the possibility for the world’s rich and famous to remain tax-free by maintaining a web of secrecy.