Blairmore Holdings, Inc. was an offshore investment company established by Ian Cameron, father of former

British Prime Minister The prime minister of the United Kingdom is the head of government of the United Kingdom. The prime minister advises the sovereign on the exercise of much of the royal prerogative, chairs the Cabinet and selects its ministers. As moder ...

, David Cameron. Following the Panama Papers leak, it was discovered that Blairmore Holdings was a customer of

Mossack Fonseca Mossack Fonseca & Co. () was a Panamanian law firm and corporate service provider.

History

Blairmore Holdings is company operated as a

collective investment fund An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages inc ...

, in which a range of individuals invest collectively in the stock market and other financial instrument. Blairmore Holdings was established in 1982. The company is named after

Blairmore House Blairmore School was an independent boarding preparatory school in Glass near Huntly, Aberdeenshire until its closure in 1993. The site is now owned and used by a Christian organisation called Ellel Ministries International as a prayer, training ...

in Aberdeenshire, the house in which the stockbroker Ian Cameron – father of UK Prime Minister David Cameron – was born. The company was incorporated in

Panama Panama ( , ; es, link=no, Panamá ), officially the Republic of Panama ( es, República de Panamá), is a transcontinental country spanning the southern part of North America and the northern part of South America. It is bordered by Co ...

, but based in the

Bahamas The Bahamas (), officially the Commonwealth of The Bahamas, is an island country within the Lucayan Archipelago of the West Indies in the North Atlantic. It takes up 97% of the Lucayan Archipelago's land area and is home to 88% of the ar ...

. According to the ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Ni ...

'': "The idea was for investors to avoid an extra layer of tax because investors came from lots of jurisdictions and some, at least, would have faced double taxation if the fund had been based in a mainstream jurisdiction — firstly by the country where the fund operated, and then by the investor's own country when he or she received his profits." The company was created after the abolition of

capital controls Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation's government can use to regulate flows from capital markets into and out of the country's capital account. These measures ...

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...

in 1979, which allowed UK individuals to invest outside the UK without first obtaining permission from the government. Ian Cameron ran Blairmore for thirty years alongside five other UK-based directors. The fund retained up to 50 Caribbean officers each year; their job was to sign paperwork and fill roles such as treasurer and secretary, to ensure that the company was not centrally managed and controlled in the UK, and so maintain its

tax residence The criteria for residence for tax purposes vary considerably from jurisdiction to jurisdiction, and "residence" can be different for other, non-tax purposes. For individuals, physical presence in a jurisdiction is the main test. Some jurisdictio ...

outside the UK. They included the late Solomon Humes, a lay bishop with the non-denominational

Church of God of Prophecy The Church of God of Prophecy is a Holiness Pentecostal Christian church. It is one of five ''Church of God'' bodies headquartered in Cleveland, Tennessee, that arose from a small meeting of believers who gathered at the Holiness Church at Camp Cr ...

. From 2002 until 2007, the fund averaged 116% annual returns, holding blue chip stocks in

Apple Inc. Apple Inc. is an American multinational technology company headquartered in Cupertino, California, United States. Apple is the largest technology company by revenue (totaling in 2021) and, as of June 2022, is the world's biggest company ...

Unilever Unilever plc is a British multinational consumer goods company with headquarters in London, England. Unilever products include food, condiments, bottled water, baby food, soft drink, ice cream, instant coffee, cleaning agents, energy dri ...

and

Coca-Cola Coca-Cola, or Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pemberton in Atlant ...

. Like many Panamanian companies, Blairmore issued

bearer shares A bearer instrument is a document that entitles the holder of the document to rights of ownership or title to the underlying property, such as shares or bonds. Unlike normal registered instruments, no record is kept of who owns bearer instruments ...

, which are not listed on a share register; rather, like banknotes, they legally belong to the person holding the certificate in their hand. In recent years, bearer shares have been abolished in many countries due to concerns that they could be used by criminals and tax evaders for money laundering and because they conceal the beneficial ownership of the company. However, there is no suggestion that Blairmore was using them for any illegal purpose, and they were common among offshore funds at the time. Using bearer shares was not always practical. There were "hundreds" of investors, according to minutes of company meetings, and the printed certificates were kept under lock and key in the Bahamas. Documents relate Ian Cameron having to count stacks of certificates to make sure none had been lost or stolen. UK investors in Blairmore Holdings are subject to the UK

offshore fund An offshore fund is generally a collective investment scheme domiciled in an offshore jurisdiction. Like the term "offshore company", the term is more descriptive than definitive, and both the words 'offshore' and 'fund' may be construed differ ...

s rules, introduced in 1984, under which all returns are subject to income tax if the fund does not obtain certification a "distributing fund" from the UK tax authorities each year, which entailed distributing most of its income to shareholders. A prospectus issued in March 2006 suggests it has been certified by

HM Revenue and Customs , patch = , patchcaption = , logo = HM Revenue & Customs.svg , logocaption = , badge = , badgecaption = , flag = , flagcaption = , image_size = , co ...

as a "distributing fund" each year to June 2004. It is now listed by HMRC as a "reporting fund" under the new offshore funds rules introduced in December 2009.

Move from the Bahamas

The company was deeply concerned with maintaining a positive image; minutes from 2001 show directors of Blairmore monitoring the news regarding Panama in order to "ensure that the jurisdiction is in keeping with the company's pristine reputation". Blairmore Holdings moved to Ireland in either 2010 or 2012, because its directors believed it would "come under more scrutiny" after David Cameron became Prime Minister. From a UK tax standpoint, the move to Ireland did not stop the company being considered an "offshore fund", but it came under European regulatory rules. Regarding the move, the ''

'' wrote:

It is no longer necessary to go offshore to receive a favourable tax regime for funds. Ireland chose not to impose local taxes on investment funds and over the past 20 years its fund industry has grown rapidly to become the third-largest centre for investment funds after the US and Luxembourg.
The fund industry made a large-scale move to onshore jurisdiction because scandals such as the fraud committed by
Bernard Madoff Bernard Lawrence Madoff ( ; April 29, 1938April 14, 2021) was an American fraudster and financier who was the admitted mastermind of the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ ...
meant that regulators were taking an increasingly dim view of tax opacity and light regulation in "tax havens". The moves were facilitated by the introduction of new rules in Europe governing retail investment funds.

Involvement of David Cameron and HMRC

In response to his late father's inclusion on the firm's list of clients, David Cameron initially in 2016 said his family's taxes were "a private matter" but later issued a statement saying that he, his wife and children receive no benefit from the company, Blairmore Holdings, which is still in operation and has assets of £35 million. Cameron inherited £300,000 after his father died in 2010. On April 6, Cameron admitted that he had owned shares in Blairmore and sold his shares before becoming Prime Minister; David and Samantha Cameron sold their holding in Blairmore in January 2010 for £31,500. David Cameron paid income tax on the dividends which he received from Blairmore during his period of ownership, but there was no

capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...

payable as the gain fell within the annual exempt amount of £10,100 in the 2009-10 tax year. '' Private Eye'' revealed that

Edward Troup Sir John Edward Astley Troup (born 26 January 1955) is a British tax lawyer, and was a civil servant at HM Treasury and then HM Revenue & Customs. He spent two periods as a tax partner at the law firm Simmons & Simmons, from 1985 to 1995 and fr ...

, appointed executive chair of HMRC in April 2016, was a former partner with

Simmons & Simmons Simmons & Simmons is a British law firm. About half of its staff are in the London office, in CityPoint, off Moorgate. It has branch offices in some countries in Europe, the Middle East and Asia. It has been mentioned in the ''Financial Times ...

, the London-based legal firm whose clients included Blairmore. Papers obtained by the '' Süddeutsche Zeitung'' and ICIJ reveal Simmons & Simmons' close relationship with running offshore companies and major overseas property owners, including an investment company run on behalf of Sheikh

Hamad bin Abdullah Al Thani Sheikh Hamad bin Abdullah bin Jassim bin Muhammed Al Thani ( ar, حمد بن عبدالله بن جاسم بن محمد آل ثاني; 1896 – 27 May 1948) was Crown Prince of the State of Qatar. Sheikh Hamad was the second son of the second E ...

, while Troup was its senior tax partner.

Political response

Prominent members of the Labour Party criticized the involvement of the Cameron family and Blairmore Holdings, Inc. in the Panama Papers leak.

Shadow Secretary of State for International Development The shadow cabinet minister for international development is the lead spokesperson for the United Kingdom's Official Opposition on issues related to international aid, most notably to the third world. The shadow cabinet minister holds the Ministe ...

Diane Abbott described the revelations as "the tip of the iceberg" and "a stitch up", and urged "meaningful reform" of the UK tax authority,

HMRC , patch = , patchcaption = , logo = HM Revenue & Customs.svg , logocaption = , badge = , badgecaption = , flag = , flagcaption = , image_size = , co ...

, while

Shadow Chancellor of the Exchequer The Shadow Chancellor of the Exchequer in the British Parliamentary system is the member of the Shadow Cabinet who is responsible for shadowing the Chancellor of the Exchequer. The title is given at the gift of the Leader of the Opposition and ...

John McDonnell John Martin McDonnell (born 8 September 1951) is a British politician who served as Shadow Chancellor of the Exchequer from 2015 to 2020. A member of the Labour Party, he has been Member of Parliament (MP) for Hayes and Harlington since 1997. ...

condemned the tax avoidance schemes as "immoral" and described the allegations as "extremely serious", saying "HMRC should treat this with utmost priority and urgently launch investigation". The Leader of the Opposition,

Jeremy Corbyn Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who served as Leader of the Opposition and Leader of the Labour Party from 2015 to 2020. On the political left of the Labour Party, Corbyn describes himself as a socialist ...

, urged an immediate independent investigation into the tax affairs of the Prime Minister's family, as well as tighter laws on UK tax avoidance. Former

Liberal Democrat Several political parties from around the world have been called the Liberal Democratic Party or Liberal Democrats. These parties usually follow a liberal democratic ideology. Active parties Former parties See also *Liberal democracy *Lib ...

Home Office Minister

Norman Baker Norman John Baker (born 26 July 1957) is a Liberal Democrat politician in the United Kingdom who was the Member of Parliament (MP) for Lewes in East Sussex from the 1997 general election until his defeat in 2015. In May 2010 he was appointed ...

called for further investigation of David Cameron's activities. Scottish National Party leader Nicola Sturgeon also called for a clampdown on UK tax avoidance which "stamps out this sort of behaviour" and called for "utter transparency" from David Cameron, adding that "what shocks people most about some of this is that it is not illegal". Opponents called for Cameron's resignation, especially after he admitted owning shares in Blairmore. Former leader of the SNP

Alex Salmond Alexander Elliot Anderson Salmond (; born 31 December 1954) is a Scottish politician and economist who served as First Minister of Scotland from 2007 to 2014. A prominent figure on the Scottish nationalist movement, he has served as leader ...

also accused Cameron of "misleading the public" but said that "I'm not calling for his resignation until I get answers" to Cameron not registering offshore investment funds from Blairmore while an MP.

UKIP The UK Independence Party (UKIP; ) is a Eurosceptic, right-wing populist political party in the United Kingdom. The party reached its greatest level of success in the mid-2010s, when it gained two members of Parliament and was the largest p ...

leader

Nigel Farage Nigel Paul Farage (; born 3 April 1964) is a British broadcaster and former politician who was Leader of the UK Independence Party (UKIP) from 2006 to 2009 and 2010 to 2016 and Leader of the Brexit Party (renamed Reform UK in 2021) from 2 ...

however has said that most legal tax avoidance was "okay" after he was questioned on why £45,000 of his income was paid into his private company rather than a personal bank account, saying that criticism of his actions was "ridiculous". Farage also said that the possibility of him releasing his tax return was a "big no" as "I think in this county what people earn is regarded as a private matter", and criticized David Cameron for being hypocritical, especially with regards to his past comments about

Jimmy Carr James Anthony Patrick Carr (born 15 September 1972) is a British-Irish comedian, presenter, writer, and actor. He is known for his deadpan delivery of controversial one-liners and distinctive laugh, for which he has been both praised and criti ...

's tax avoidance. The

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noted that "The Isle of Man here Farage was keeping his incomewas one of the UK's crown dependencies which signed an agreement on corporate disclosure at a recent meeting with David Cameron amid claims that individuals and firms are using offshore locations to reduce their tax liabilities", adding that the Isle of Man rejects any allegations that they are used for the purpose of tax avoidance.

References

{{Reflist, 30em David Cameron 2016 scandals 2013 scandals Tax avoidance Money laundering Investigative journalism