British Prime Minister David Cameron personally intervened against cracking down on offshore trusts in tax havens by the European Union in 2013, in what seems to be his efforts to protect his father’s trust, which was revealed by the recent Panama Papers leak.
In 2013, Cameron said in a letter to then President of the European Council Herman Van Rompuy that trusts should not automatically be subject to the same transparency requirements as companies, meaning the ultimate owners of the trusts must not be identified by tax authorities.
The document was unearthed by the Financial Times and remains on public government websites, British media reported Thursday.
His letter was in response to the EU’s plan to expose dealings of offshore bodies by publishing a central register of their ultimate owners. The policy would have seen the EU clamp down on those individuals and hold them responsible for tax avoidance.
Such register would have also exposed that Cameron himself was involved in offshore tax avoidance putting his political reputation in jeopardy.
Cameron said in his letter to Van Rompuy that tax authorities were already “gaining access to more information than ever before on trusts, especially offshore trusts,” through information-exchange agreements with tax authorities in different countries.
The news comes as Cameron faces mounting pressure over the the revelation that his father, Ian Cameron, helped create and develop Blairmore Holdings trust in Panama in 1982 and was involved in the investment fund until his death in 2010.
The documents show him as “instrumental in the formation of Blairmore Holdings Inc. in the early 1980s." In July 1998, the fund was valued at nearly US$20 million. Promotional literature noted the fund was “not liable to taxation on its income or capital gains,” and that the fund "will not be subject to United Kingdom corporation tax or income tax on its profits."
By EU standards, companies are required to publicly reveal their end-owners in order to hold them responsible for taxation. In 2013, European authorities wanted to extend the same rules to include offshore trusts.
But Cameron argued that such policies should be implemented by global bodies, such as Organization for Cooperation and Development and the G20, and not governments.
Those bodies, however, have failed over the years to reach any concrete consensus over such financial and tax reforms.
Judith Sargentini, the Dutch MEP who led the European Parliament's work on the draft rules, told the Financial Time she saw the U.K.’s call for different treatment for trusts as “a danger and a possible loophole.”