London: Millions of pounds from the private estate of Britain’s Queen Elizabeth II have been invested in offshore tax haven funds, a huge new leak of financial documents have revealed, but the monarchs estate managers defended the investments by calling them “fully” legitimate. The 91-year-old monarch’s investments appear among a series of high-profile names to feature in the Paradise Papers, a leak of 13.4 million files from two offshore service providers and the company registries of 19 tax havens.
The Duchy of Lancaster, which provides the Queen with an income, held funds in the Cayman Islands and Bermuda British overseas territories with no corporation tax and at the centre of the offshore financial industry. A small amount from the funds ended up in the company behind BrightHouse, a chain accused of irresponsible lending, and retail chain Threshers, which went bust owing £17.5 million in UK tax. A spokesperson for the Duchy of Lancaster said: “We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate. The Queen voluntarily pays tax on any income she receives from the Duchy.”
The Duchy added that the BrightHouse holding now equates to only £3,208 and it was not involved in fund investment decisions and claimed that it had been unaware the retail featured in the investments. The documents show the Duchy of Lancaster put £5 million in the Jubilee Absolute Return Fund Limited in Bermuda in 2004, with the investment coming to an end in 2010. In 2005, it agreed to put £7.5 million in the Dover Street VI Cayman Fund LP.
The Duchy, which is worth more than £500 million, said it received no tax advantages from investing offshore. It, however, admitted it had no idea about its 12-year investment in the controversial BrightHouse chain from one of the funds until approached by the Guardian newspaper and other partners in the international project called Paradise Papers.
Opposition Labour MP Margaret Hodge, the former chair of the House of Commons Public Accounts Committee, said she was “pretty furious” with the Queen’s investment advisers for endangering her reputation. There is no allegation of anything illegal in the investments being exposed and no suggestion that the Queen is not paying tax. However, it raises questions about whether the British monarch should be investing in offshore finance.
