Panama Leaks: British PM makes his Tax Returns Transparent

Written by  Published by:Pakistan Views Monday, 11 April 2016 10:51

LONDON: Prime Minister David Cameron of Britain, admitting that he had made a mess of responding to questions about his inheritance from his father, who had an investment company offshore, on Sunday released information from his tax returns for the past six years.

Mr. Cameron has moved belatedly to try to defuse a furor over his finances in the wake of the release last week of leaked information about offshore companies in the so-called Panama Papers, which showed that his father, Ian, was a director of an offshore trust that paid no British taxes.

Mr. Cameron insisted that neither he nor his father had done anything illegal. He said all taxes due had been paid on proceeds from the fund and on an inheritance of 300,000 pounds, or about $424,000 according to current exchange rates, that he received when his father died in 2010.

The tax information Mr. Cameron released also showed that he received £200,000 (about $282,400) from his mother in 2011, on which he will pay no inheritance tax if she lives until 2018, but more questions were raised about whether those funds came from offshore accounts.

Mr. Cameron has said that he and his wife, Samantha, sold their interest in his father’s fund four months before he became prime minister in 2010 and that they had paid the full tax on the proceeds. They paid £12,497 (about $17,600) for it in 1997 and sold it for £31,500 (about $44,400), which just escaped capital gains taxes because the profits were split between him and his wife.

Read: Panama Leaks: "I profited from it, Wish I would have Handled it Better", PM Cameron

In the past, Mr. Cameron has condemned Britons who set up offshore accounts to avoid paying British taxes. On Saturday, he promised to release his tax information, but not his complete tax returns. Still, he is the only British prime minister to have done so.

Thousands of people demonstrated outside the gathering on Saturday, demanding that Mr. Cameron resign and mocking the Panamanian law firm at the heart of the leak, with the slogan: “Mossack Fonseca: Because taxes are for poor people.”

Tax Return Details

The documents released by Mr. Cameron, produced by the English accounting firm RNS, showed that he had paid £75,898 ($107,170) on taxable income of £200,307 ($282,839) in the most recent tax year.

His 2014-15 income included his salary and expenses of £150,356 ($212,307), £46,899 ($66,222) from the annual rental of the Cameron family home in West London while he is living at Downing Street, and £3,052 ($4,309) in interest earned from savings on deposit in a London bank. He has said he and his wife own no shares in companies.

The previous year he paid £76,288 ($107,721) in taxes on taxable income of £200,735 ($283,444).

Before becoming prime minister, Mr. Cameron sold £140,000 (about $197,684) in shares, including those in the offshore fund.

In total, since 2009 he has paid £402,283 (about $568,036 at the current exchange rate) in taxes on taxable income of £1,078,008 ($1,522,180), an effective tax rate of 37 percent.

Still, the records released do not clarify whether Mr. Cameron profited from other tax-avoidance vehicles before 2010. British newspapers also criticized his failure to include the £500,000 (roughly $706,015) he received from his family estate in three tax-free payments over two years after his father’s death. Taking the payments this way, which is legal, avoided the payment of £70,000 (about $98,800) in capital gains taxes, according to The Mail on Sunday, which had the headline: “Cameron Tax Bill Dodge.”

 

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