Tony Blair used secret fund to manage multi-million pound fortune
Tony Blair used a secret trust to manage his multi-million pound fortune, it emerged on Friday.
The former Prime Minister used an interest-in-possession (IIP) trust, which he has not previously disclosed, to receive payments for his consultancy projects, including his work with controversial regimes.
IIP trusts do not have to file accounts, and can offer significant tax advantages, including the possibility of passing on wealth to children free of tax.
They are legal entities which can hold property, shares or other sources of income for a beneficiary. Mr Blair’s lawyers refused to say why he had set up the trust, other than his desire for privacy. They added that the trust does not give him a tax advantage.
MPs called for an investigation after it was claimed last night that consultants hired by Mr Blair’s lawyers approached Dave Hartnett, head of Revenues & Customs, to ask about the trust. Shortly after Mr Blair left office in 2007, two of his advisers discussed with HMRC officials how the fund would be treated for tax purposes, The Times reported.
A spokesperson for Mr Blair said: "Tony Blair did not set up this structure for reasons of tax advantage. He has paid full UK tax on all his earnings.
“He specifically instructed the accountants who set up the structure that there was to be no tax advantage or avoidance through it. Neither did he receive any special 'privilege' from the tax authorities.”
In 2006, Mr Blair’s government bought in a 20 per cent “entry charge” on assets placed into IP trusts worth more than the inheritance tax threshold of £325,000, in an effort to clamp down on tax avoidance.
Earlier this year, The Telegraph disclosed how a firm set up by Mr Blair to manage his business interests tripled its profits last year, as he rewarded staff with an average pay increase of more than £30,000.
The accounts for Windrush Ventures Ltd, one of the companies that coordinates his commercial affairs, show that the former prime minister has enjoyed his most successful year yet. Turnover at the company has risen by more than a third to £19.4 million, while profits trebled to £2.6 million.
The average staff salary increased by almost £35,000 to £103,791. The combined shareholders funds at Windrush and Firerush Ventures, another group of companies in Mr Blair’s business empire, rose to almost £10 million. Mr Blair is the ultimate and sole owner of the firms.
Last year a Telegraph investigation revealed how the former prime minister has nurtured a network of some of the world’s most influential leaders and businessmen to build up a roster of clients paying tens of millions of pounds for his advice.
He has also privately begun acting as broker between Abu Dhabi and China, facilitating talks between key figures from the two countries.
Watch: Tony Blair by numbers
Tony Blair by numbers
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