The unanswered questions that Ashcroft has yet to address

Andy McSmith,Sean O'Grady
Tuesday 02 March 2010 01:00 GMT

Q: On what grounds was Lord Ashcroft's non-dom status granted?

A: It is unusual for someone to become a non-dom by choice rather than by family origins (assuming Lord Ashcroft's father was not born abroad). His links to Belize are real and well known, but so are his connections with the UK – no one claims he has entirely emigrated. Non-dom status is hard won if it's a matter of HMRC discretion, and normally requires evidence that a long-term "permanent home" is outside the UK. What evidence did Lord Ashcroft provide to back his claim?

Q: How can a British citizen who claims to be a permanent resident of the UK gain non-domicile tax status?

A: It is only possible – if "permanent" is helpfully re-interpreted to mean "long-term", as Lord Ashcroft's statement yesterday indicates. Upon being conditionally offered a peerage in 2000, Lord Ashcroft wrote to the then Conservative leader William Hague committing himself to "take up permanent residence" in Britain. But now he reveals that before he took his place in the Lords, he entered into "dialogue with the Government" and it was "officially confirmed that the words 'permanent residence' was to be that of a 'long-term resident'."

But did Lord Ashcroft inform William Hague of the change in the interpretation of those words? If he did, then did Mr Hague still think it was acceptable for a non-dom to be a member of the House of Lords? If he did not, what is his view now of Mr Ashcroft and his tax status?

Q: When did Lord Ashcroft become a non-dom?

A: We do not know for how long Lord Ashcroft has enjoyed non-dom status, and whether he did before or after his letter to William Hague and his acceptance of a peerage, though it is difficult to believe he would have sought a reinterpretation of "permanent" as long term for many other reasons.

Q: Will Lord Ashcroft relinquish his non-dom status for good?

A: Although implied in the statement, there is nothing that explicitly requires Lord Ashcroft to do so. Presumably, his non-dom status and membership of the House of Lords are incompatible if David Cameron becomes PM and changes the law to make it so, although we do not know when Mr Cameron intends to get round to his the new legislation. Lord Ashcroft has only said: "I agree with this change and expect to be sitting in the Lords for many years to come." It could take that long to change the law. Theoretically, he could also reapply for non-dom status.

Q: How much tax does he pay in the UK?

A: Lord Ashcroft's tax affairs are unknown. Most non-doms choose this status to minimise their tax bills in the UK, where rates are often higher than in other parts of the world. His political opponents say that he is avoiding tax bills of at least £12m a year.

Q: Did David Cameron and William Hague know about Ashcroft's tax status?

A: David Cameron has said that he did not know, and did not need to know. He maintained that Lord Ashcroft's tax status was a private matter between him and Inland Revenue. William Hague was more closely involved, and seemed to be under the impression that Lord Ashcroft was paying UK taxes. He said that Lord Ashcroft had fulfiled the conditions attached to his peerage, and when asked if that meant that Lord Ashcroft was a UK taxpayer he said: "I imagine that was the obligation that was imposed on him."

This raises the question of whether William Hague was misled into believing that Lord Ashcroft was domiciled in the UK for tax purposes, or whether he knew that the peer was paying tax on only a fraction of his wealth, and gave a misleading answer. The only Tory to give what turns out to have been the correct answer was the shadow Commons leader, Sir George Young, who described Lord Ashcroft as a "non-dom", only to be slapped down by Tory spin-doctors who said that Sir George had "mis-spoken". It would be interesting to know who it was who told them to say that.

Q: Why has he taken so long to confirm his tax status?

A: Lord Ashcroft says that he likes his privacy, but he must have known that anyone who takes a seat in the Houses of Parliament becomes a public figure, and as a consequence loses the type of privacy enjoyed by people who are not involved in Westminster politics. He must also have known that the revelation that he is a non-dom would cause controversy, and therefore hoped to keep the information away from the public.

Q: Is the company that channels his donations to the Tory party genuinely British?

A: Lord Ashcroft's company, Bearwood Corporate Services, is the biggest single donor to the Conservative Party, but what is not clear is whether it is trading in the UK. The Electoral Commission is trying to find out whether this is the case. It is the longest investigation in the Commission's history, with no date yet as to when it will be concluded.

This, of course, raises the question of whether the Conservative Party should pay back the millions that it has received from Lord Ashcroft's company.

If the Electoral Commission eventually concludes that Bearwood is not trading in the UK, then the donations it has made to the Conservative Party would appear to be illegal, and the party may indeed have to hand the money back.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in