The Queen voluntarily pays tax on income from the Duchy of Lancaster and its investments, a spokesman said © EPA
A huge leak of financial documents has revealed the offshore interests of hundreds of high-profile companies and individuals, including millions of pounds invested by the Queen’s private estate in a Cayman Islands fund.
The revelations are the result of lengthy investigations by journalists across the world, who have examined 13.4m files belonging to professional services firms and offshore corporate registries.
The BBC and the Guardian said the Queen, through the Duchy of Lancaster, a private estate, had committed £7.5m to Dover Street VI Cayman Fund LP in 2005.
This fund then took an interest in a private equity vehicle called Vision Capital Partners, the Guardian reported, which went on to buy stakes in two UK retailers, the off-licence chain Threshers, and the retailer BrightHouse.
The BBC said there was nothing illegal in the investments and no suggestion that the Queen was not paying tax. But it said questions might be asked about whether the monarch should be investing offshore.
A spokesman for the Queen told The Guardian that the Duchy had an ongoing investment in the Cayman Island fund and was not aware of the investment in BrightHouse. The Queen voluntarily pays tax on income from the duchy and its investments, the spokesman said.
Offshore funds are often used to avoid double taxation and ensure tax neutrality if investors come from different jurisdictions.
The Guardian said the data also revealed extensive offshore dealings by Donald Trump’s cabinet members, advisers and donors, including substantial payments from a firm co-owned by Vladimir Putin’s son-in-law to the shipping group of the US commerce secretary, Wilbur Ross.
James Rockas, Mr Ross’s press secretary, said in a statement that the commerce secretary’s holding would not conflict with his government duties on trade and industry, it reported. “Secretary Ross recuses himself from any matters focused on transoceanic shipping vessels,” said Rockas.
The papers also made waves in Silicon Valley, where they highlighted the ties between Russian state funds and a big investor in Twitter and Facebook. According to a summary of the papers posted by the International Consortium of Investigative Journalists, Russian money from state-controlled VTB Bank and from a Gazprom subsidiary funded lucrative investments in Twitter and Facebook through DST Global, a firm led by Russian billionaire Yuri Milner.
A spokesman for Twitter said the company had properly reviewed all of its investments, and noted that DST Global sold its Twitter shares in 2014. Facebook said DST had sold its shares in the company five years ago, and had been a passive investor without voting rights or a board seat. DST did not immediately respond to a request for comment.
The Guardian also reported that it had uncovered a previously unknown $450m offshore trust that has sheltered the wealth of Lord Ashcroft, a former treasurer and deputy chairman of the Conservative party.
Lord Ashcroft’s spokesman told the Guardian said the peer had never engaged in tax evasion, abusive tax avoidance or tax avoidance using artificial structures, and “any suggestion or implication that he has will be vigorously challenged”.
The ICIJ said the leaked documents, dubbed the Paradise Papers, showed “how deeply the offshore financial system is entangled with the overlapping worlds of political players, private wealth and corporate giants, including Apple, Nike, Uber and other global companies that avoid taxes through increasingly imaginative bookkeeping manoeuvres”.
The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the ICIJ with partners including the Guardian, the BBC and the New York Times.
The Guardian said at the centre of the leak was Appleby, a law firm that employs around 470 people, operating from Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Mauritius, the Seychelles, Hong Kong and Shanghai. It advises global public and private companies, financial institutions, and wealthy individuals.
Appleby said it had “thoroughly and vigorously investigated the allegations and we are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients”. It added: “We are a law firm which advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour.”
Additional reporting by Leslie Hook in San Francisco