David Cameron has said he and his wife Samantha owned shares in an offshore trust set up by his late father, before selling them for £30,000 in 2010.
The PM has faced questions over Blairmore Holdings, an offshore company set up by his late father, Ian.
He told ITV News he had paid all UK taxes due on the profits he made from the sale of the shares and said the firm had not been set up to avoid tax.
Labour said the PM had been forced into the “extraordinary admission”.
The BBC understands Mr Cameron will publish his tax returns, possibly next week.
There have been days of headlines about Blairmore Holdings, a fund for investors which, until 2006, used “bearer shares” to protect its clients’ privacy, following the leak of 11 million documents held by Panama-based law firm Mossack Fonseca.
They show that Ian Cameron, who died in 2010, was one of five UK directors who flew to board meetings in the Bahamas or Switzerland.
On Wednesday, Downing Street issued a statement saying Mr Cameron, his wife and children did not benefit from offshore funds – following a day of questions from the media about whether his family retained an interest in the fund.
On Thursday Mr Cameron told ITV News: “I don’t have anything to hide. I’m proud of my dad and what he did and the business he established… I can’t bear to see his name being dragged through the mud.”
The PM said it had been a “difficult few days, reading criticisms of my father and his business practices – my dad, a man I love and admire and miss every day”.
Mr Cameron said much criticism was based on a “fundamental misconception” that Blairmore Investment was set up to avoid tax.
“It wasn’t. It was set up after exchange controls went, so that people who wanted to invest in dollar denominated shares and companies could do so, and there are many other, thousands of other unit trusts set up in this way,” he said.
What Cameron said when:
- Asked on Monday whether she could confirm that no family money was still invested in the fund, Mr Cameron’s spokeswoman said: “That is a private matter”
- Then in an interview on the same day, Mr Cameron said: ” I have no shares, no offshore trusts, no offshore funds, nothing like that. And, so that, I think, is a very clear description”
- Downing Street issued a statement on Wednesday: “To be clear, the prime minister, his wife and their children do not benefit from any offshore funds. The prime minister owns no shares. As has been previously reported, Mrs Cameron owns a small number of shares connected to her father’s land, which she declares on her tax return”
- No 10 then released a further clarifying statement, saying: “There are no offshore funds/trusts which the prime minister, Mrs Cameron or their children will benefit from in future”
- On Thursday the PM told ITV News: “We owned 5,000 units in Blairmore Investment Trust, which we sold in January 2010”
Mr Cameron said the fund was “properly audited” and reported to the Inland Revenue every year. Anyone who bought units in it was subject to capital gains tax when shares were sold, he said.
He said that he had owned stocks and shares in the past but sold them in 2010 shortly before he became prime minister.
“I didn’t want to anyone to say you’ve got other agendas or vested interests,” he said.
“Samantha and I had a joint account and we owned 5,000 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, but there was a profit on it, but that was less than the capital gains tax allowance, so I didn’t pay capital gains tax, but it was subject to all the UK taxes in all the normal ways.”
Downing Street said Mr and Mrs Cameron bought their holding in April 1997 for £12,497 and sold it in January 2010 for £31,500. That year the personal allowance before capital gains tax was paid was £10,100 per person.
What are the Panama Papers?
A leak of 11.5 million documents has lifted the lid on how the rich and powerful use tax havens to hide their wealth.
The files were leaked from one of the world’s most secretive companies, a Panamanian law firm called Mossack Fonseca.
Among the files are details about:
- The late father of UK Prime Minister David Cameron
- The brother-in-law of China‘s President Xi Jinping
- Ukraine President Petro Poroshenko, and Argentina’s President Mauricio Macri
- Three of the four children of Pakistan‘s Prime Minister Nawaz Sharif
- The documents show that Iceland‘s Prime Minister, Sigmundur Gunnlaugsson, had an undeclared interest linked to his wife’s wealth. He has now resigned
Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing.
BBC political correspondent Iain Watson said that while there was no suggestion of illegality, it would be “politically embarrassing” for Mr Cameron to be associated with a company which did not pay tax in the UK, at a time when he was trying to encourage overseas territories to be more transparent about tax and was trying to clamp down on tax havens.
Labour’s deputy leader Tom Watson said it was an “extraordinary admission”: “David Cameron, who described the use of complex tax avoidance schemes as “morally wrong”, has been forced to admit that he held shares in a fund now linked to tax avoidance.”
‘Governing from shadows’
He said there would be further questions about what Mr Cameron knew about the fund: “The time has come for David Cameron to put the record straight rather than having details dragged from him in instalments.”
He told BBC News: “It feels like the prime minister is governing from the shadows in this announcement today. That he’s been withholding personal information that he feels personal shame about.”
And SNP economy spokesman Stewart Hosie MP described it as “an astounding revelation by a prime minister who has questioned the morality of using such tax-avoiding schemes”.
He added: “David Cameron says he doesn’t have anything to hide, yet had it not been for the Panama Papers leak we would have been none the wiser – and even then it has taken him several days to clarify he benefited from his father’s off-shore trust.”
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