Backlash Begins (16/02/15)
Ed Miliband has, as I expected been accused of rank hypocrisy over his attempt to paint himself and the Labour Party as 'whiter than white' over tax avoidance.
Ed Miliband is personally exposed by a family arrangement to change Ralph Miliband's will by a 'deed of variation' which allowed them to re-allocate the father's assets (even after his death) in a way that minimised or avoided a big inheritance tax bill.
So instead of their mother acquiring all of the family's property assets, the two brothers were allocated 20% each while their mum retained 60%.
Now this was perfectly lawful and most people would say it was eminently sensible as well, but you can't dress it up as anything other than tax avoidance or minimising your tax bill, I'm afraid.
And other skeletons are starting to tumble out of Labour's closet as this article from The Sunday Times demonstrates only too well.
Soon we'll be on to people who are not well-known Labour donors but prominent supporters such as Sir Alex Ferguson though the public won't be interested in such a fine distinction, if you ask me.
Soon we'll be on to people who are not well-known Labour donors but prominent supporters such as Sir Alex Ferguson though the public won't be interested in such a fine distinction, if you ask me.
Top Labour donor in tax haven row
Tories accuse Miliband of hypocrisy
By James Lyons, Josh Boswell and Jon Ungoed Thomas - The Sunday Times
Sir David Garrard placed shares in an offshore trust that can be used to avoid tax
ED MILIBAND is facing accusations of hypocrisy over revelations that a property tycoon who is bankrolling the Labour party placed shares in an offshore trust that can be used to avoid tax.
Details of the financial arrangements of Sir David Garrard came to light after the HSBC Swiss bank accounts scandal ignited a furious political row over tax.
Miliband yesterday stepped up his attack on Lord Fink, the Conservative donor who said he had put shares into family trusts as part of “vanilla” tax avoidance measures.
Conservatives said Garrard’s use of offshore arrangements meant that Miliband was guilty of “breathtaking” double standards.
Lawyers acting for the Labour donor said he had done nothing wrong when shares in his property company, Minerva, were “settled on trusts for him and his late wife”. All the transactions were fully declared to the UK tax authorities.
The row raged amid developments in the scandal, which has seen HSBC admit helping clients to avoid tax with secret Swiss accounts and UK tax officials pilloried over their handling of a leaked list of those involved. Yesterday:
Miliband announced that a Labour government would hold a full and independent inquiry into HM Revenue & Customs
HSBC issued a public apology for its actions
Lord Green, the HSBC chairman at the time of the scandal and who was made a minister by David Cameron, was revealed to have avoided paying up to £2.3m tax on his bank pension
Green stepped down as head of The City UK, the financial services trade body, in the wake of the scandal
Senior executives at HSBC’s private bank were found to have pocketed £70m in pay and bonuses in three years
Miliband faced criticism over a property company run by Labour which has paid no corporation tax for a decade.
Garrard is among a small band of wealthy supporters who have donated to Labour since Miliband beat his brother David to the party leadership. Garrard gave £690,000 last year to the party and has promised to fund Labour’s battle against the SNP in Scotland.
The tycoon, who was embroiled in the cash for honours scandal, made his fortune through Minerva, a property investment and development firm that he set up with Andrew Rosenfeld, also a Labour donor, who died last week.
Shares from the company were placed in trust for Garrard and his wife when it was founded in 1989.
Minerva company documents from 1998, seen by The Sunday Times, show that 1.8m shares were held on behalf of the David Garrard 1989 Trust by a Jersey company, Hummel Investments Limited. Officials from the Codex Trust Company, based in the tax haven of Liechtenstein, also acted on behalf of the family trust. In 1995, 16.7m Minerva shares were transferred to this company. Garrard’s lawyers declined to comment on whether these shares were held on behalf of the family trust.
In 2005 Minerva announced that shares from Garrard’s family trusts had been sold as the tycoon retired from the business. It was reported that he made £37m from the sale of shares at the time.
He was living as a tax exile in Switzerland after his retirement when he was nominated for a peerage. His name was withdrawn after revelations that he was among Labour supporters who had made secret loans to the party.
Experts say placing shares offshore before 1998 offered possible reductions in capital gains tax liabilities when they were sold. The rules on trusts have since been tightened.
Last night the Tory MP Andrew Bridgen said of Garrard: “Miliband’s hypocrisy on this issue is absolutely breathtaking. He’s tried to sound tough on tax avoidance but has taken hundreds of thousands of pounds from someone who has made use of offshore family trusts.”
His comments came as Miliband faced further embarrassment when two more Labour supporters faced questions over their tax affairs last night.
Bill Thomas, chairman of Labour’s small business taskforce who Ed Balls had referred to as “Bill somebody” in a television interview, has invested with the controversial Invicta Film Partnership, according to The Sun on Sunday. A number of Invicta’s schemes are under investigation by HMRC. Thomas denied investing in order to cut his tax.
The green energy tycoon Dale Vince, who last week promised Labour £250,000, has loaned himself £3.2m interest free from his company Ecotricity, according to The Sunday Telegraph. If Vince used the loan as a replacement for a salary, he could have reduced his income tax bill.
Conservatives also seized on the fact that Labour Party Properties Limited, a company wholly owned by the party, has not paid corporation tax for more than 10 years despite raking in almost £10m in rents.
Dozens of MPs have been charging taxpayers hundreds of thousands of pounds in expenses to hire constituency offices from the firm since rgw last election. The corporation tax payment was £44,000 in 2002.
Charlie Elphicke, a Conservative MP, said: “It’s the same old do-as-we-say-not-as-we-do attitude from the Labour party. ”
Labour emphasised that independent auditors were happy with the company’s arrangements. “The Labour party takes no measures to reduce our tax liability and we pay all tax that is due,” a party spokesman said.
“The purpose of Labour Party Properties is to ensure the organisation’s properties are fit for purpose rather than to return a profit and rents received are used to maintain the buildings in the portfolio.”
Miliband has already faced questions about his own tax affairs, particularly a deal that reduced inheritance tax on his parents’ north London home.
At Labour’s Welsh conference yesterday he declared he would not “back down” and said Cameron was “turning a blind eye” to tax avoidance.
Labour is also expected to raise questions about the family trust of George Osborne, the chancellor, and the tax arrangements of Cameron’s father-in-law, Lord Astor, whose estate on the Scottish island of Jura has been held in an offshore trust.
ED MILIBAND is facing accusations of hypocrisy over revelations that a property tycoon who is bankrolling the Labour party placed shares in an offshore trust that can be used to avoid tax.
Details of the financial arrangements of Sir David Garrard came to light after the HSBC Swiss bank accounts scandal ignited a furious political row over tax.
Miliband yesterday stepped up his attack on Lord Fink, the Conservative donor who said he had put shares into family trusts as part of “vanilla” tax avoidance measures.
Conservatives said Garrard’s use of offshore arrangements meant that Miliband was guilty of “breathtaking” double standards.
Lawyers acting for the Labour donor said he had done nothing wrong when shares in his property company, Minerva, were “settled on trusts for him and his late wife”. All the transactions were fully declared to the UK tax authorities.
The row raged amid developments in the scandal, which has seen HSBC admit helping clients to avoid tax with secret Swiss accounts and UK tax officials pilloried over their handling of a leaked list of those involved. Yesterday:
Miliband announced that a Labour government would hold a full and independent inquiry into HM Revenue & Customs
HSBC issued a public apology for its actions
Lord Green, the HSBC chairman at the time of the scandal and who was made a minister by David Cameron, was revealed to have avoided paying up to £2.3m tax on his bank pension
Green stepped down as head of The City UK, the financial services trade body, in the wake of the scandal
Senior executives at HSBC’s private bank were found to have pocketed £70m in pay and bonuses in three years
Miliband faced criticism over a property company run by Labour which has paid no corporation tax for a decade.
Garrard is among a small band of wealthy supporters who have donated to Labour since Miliband beat his brother David to the party leadership. Garrard gave £690,000 last year to the party and has promised to fund Labour’s battle against the SNP in Scotland.
The tycoon, who was embroiled in the cash for honours scandal, made his fortune through Minerva, a property investment and development firm that he set up with Andrew Rosenfeld, also a Labour donor, who died last week.
Shares from the company were placed in trust for Garrard and his wife when it was founded in 1989.
Minerva company documents from 1998, seen by The Sunday Times, show that 1.8m shares were held on behalf of the David Garrard 1989 Trust by a Jersey company, Hummel Investments Limited. Officials from the Codex Trust Company, based in the tax haven of Liechtenstein, also acted on behalf of the family trust. In 1995, 16.7m Minerva shares were transferred to this company. Garrard’s lawyers declined to comment on whether these shares were held on behalf of the family trust.
In 2005 Minerva announced that shares from Garrard’s family trusts had been sold as the tycoon retired from the business. It was reported that he made £37m from the sale of shares at the time.
He was living as a tax exile in Switzerland after his retirement when he was nominated for a peerage. His name was withdrawn after revelations that he was among Labour supporters who had made secret loans to the party.
Experts say placing shares offshore before 1998 offered possible reductions in capital gains tax liabilities when they were sold. The rules on trusts have since been tightened.
Last night the Tory MP Andrew Bridgen said of Garrard: “Miliband’s hypocrisy on this issue is absolutely breathtaking. He’s tried to sound tough on tax avoidance but has taken hundreds of thousands of pounds from someone who has made use of offshore family trusts.”
His comments came as Miliband faced further embarrassment when two more Labour supporters faced questions over their tax affairs last night.
Bill Thomas, chairman of Labour’s small business taskforce who Ed Balls had referred to as “Bill somebody” in a television interview, has invested with the controversial Invicta Film Partnership, according to The Sun on Sunday. A number of Invicta’s schemes are under investigation by HMRC. Thomas denied investing in order to cut his tax.
The green energy tycoon Dale Vince, who last week promised Labour £250,000, has loaned himself £3.2m interest free from his company Ecotricity, according to The Sunday Telegraph. If Vince used the loan as a replacement for a salary, he could have reduced his income tax bill.
Conservatives also seized on the fact that Labour Party Properties Limited, a company wholly owned by the party, has not paid corporation tax for more than 10 years despite raking in almost £10m in rents.
Dozens of MPs have been charging taxpayers hundreds of thousands of pounds in expenses to hire constituency offices from the firm since rgw last election. The corporation tax payment was £44,000 in 2002.
Charlie Elphicke, a Conservative MP, said: “It’s the same old do-as-we-say-not-as-we-do attitude from the Labour party. ”
Labour emphasised that independent auditors were happy with the company’s arrangements. “The Labour party takes no measures to reduce our tax liability and we pay all tax that is due,” a party spokesman said.
“The purpose of Labour Party Properties is to ensure the organisation’s properties are fit for purpose rather than to return a profit and rents received are used to maintain the buildings in the portfolio.”
Miliband has already faced questions about his own tax affairs, particularly a deal that reduced inheritance tax on his parents’ north London home.
At Labour’s Welsh conference yesterday he declared he would not “back down” and said Cameron was “turning a blind eye” to tax avoidance.
Labour is also expected to raise questions about the family trust of George Osborne, the chancellor, and the tax arrangements of Cameron’s father-in-law, Lord Astor, whose estate on the Scottish island of Jura has been held in an offshore trust.
