The Conservative peer, who has used debates in the House of Lords to defend tax avoidance, has emerged as one of many high-profile clients of Appleby, the law firm at the centre of the Paradise Papers.
Established by his grandmother, Doris Herschorn, the trust has invested and distributed money to the peer, who is a relative of the war poet Siegfried Sassoon, his father and half a dozen family members for more than half a century. It controlled a Bahamas investment vehicle called Orchard Ltd, which in 2008 held funds worth almost $250m.
In 1989, Sassoon is recorded as having received a $2.4m distribution from the trust to a London bank account. The peer says he has received no benefits from the fund for more than 25 years.
There is no suggestion any laws were broken, and the beneficiaries in some cases paid large amounts of tax when receiving payments in the UK.
The revelation raises questions about why peers are specifically entitled by the Lords code of conduct to keep family trusts secret, when they have to declare most other significant financial interests on the official register.
Tamasin Cave of the campaign group Alliance for Lobbying Transparency said: “This is why we have disclosure rules: to ensure that MPs and peers act in the public interest and not for private gain.
“The exclusion of family trusts from these rules is an anomaly that needs to be addressed. As with any other outside interest, the public should have a right to know if an MP or peer financially benefits from or manages a trust. The financial affairs of legislators are a matter of public interest.”
Sassoon has never declared the existence of the Herschorn trust to parliament. Lords are exempt from listing trusts in the official registers of their financial interests. Point 66 of the guidance to the House of Lords code of conduct states clearly that holdings in a collective investment vehicle “are not generally registrable” and “members who are beneficiaries of trusts should treat them in the same way”.
Sassoon will shortly be asked, along with the rest of the Lords, to approve the latest finance bill. Appleby’s records suggest the trust, officially called The Mrs DCR Herschorn Settlement, was using a technique known as “washing out”. The term refers to ways of paying certain beneficiaries that can legally reduce tax on money accumulated by the trust. In its current draft, the finance bill sets out to clamp down on washing out.
Sassoon said he had “at all times” disclosed his interests during Lords debates as required. Since leaving government, he says he has not spoken in debates concerning tax matters. “If I were to speak in future debates on tax issues, I would disclose any relevant interest,” the peer said.
Accounts filed with Appleby show that the funds held by Orchard ballooned rapidly. In the four years to 2008, they appear to have grown by 40%.
Sassoon worked at the Treasury for 11 years. Most recently, he was a minister under David Cameron, holding the post of commercial secretary to the Treasury before leaving for a job in finance in 2013. While answering questions on behalf of the government in a 2010 debate about tackling avoidance, he told the Lords: “Minimising tax payments is perfectly reasonable.”
While politicians including Nick Clegg were at the time describing tax avoidance as legal but morally unacceptable, Sassoon argued: “There is a big difference between tax evasion and tax avoidance. After all, everyone with an ISA is involved in tax avoidance.”
The files suggest that in September 2006, when management of the Herschorn trust was transferred to Appleby from another company, Sassoon and members of his family met officers from the firm’s Cayman Islands office for lunch at a plush hotel in Victoria, central London.
“Lunch at the Goring is always a pleasurable experience and interesting conversation was exchanged on a variety of topics throughout,” an Appleby officer recorded in minutes of the meeting. It was decided the Sassoons would visit the Cayman Islands, where the trust was administered, for a couple of days later that year. The officer speculated that “the main business discussions would no doubt take place at that time due to the non-private nature of an open restaurant”.
Original Article
Source: theguardian.com
Author: Juliette Garside
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