As a former banker with 25 years’ experience, Mrs Leadsom understand finance better than almost any other MP – but her family's past use of legal methods of minimising her family’s tax liabilities could prove an embarrassment in hard fought leadership contest.
She was visibly caught off guard when questioned on BBC 1’s Andrew Marr programme whether , if elected, she would follow David Cameron’s example and publish her tax returns.
She replied: “I’m…I’m…Would I do it? Yes, I mean I’m perfectly happy to publish…I would not want to make MPs have to do that. I don’t believe that people should have to disclose everything in life. I’ll have to think about that. In principle I’ve no problem with it, but I don’t want to set a precedent.”
When asked by Marr “Couldn’t you just say yes?” she replied – “Yes.”
The same question was put to the other leading candidates, Theresa May and Michael Gove, who answered that they would publish their tax details, if elected.
Mrs Leadsom’s hesitancy may be related to information uncovered by The Independent in April 2014, about the tax arrangements of Bandal, a buy to let company created in 2003 by Mrs Leadsom and her husband, Benjamin, to invest in more than £1 million worth of properties in Oxford and Surrey.
Documents seen by The Independent indicated that in 2004 the firm raised loans from Kleinwort Benson (Channel Islands) Ltd, based in Jersey, a tax haven.
In 2005, 24 per cent of the shares in the company were transferred to two trusts set up for the benefit of the couple’s children, as a way of avoiding inheritance tax.
Helen Goodman, a Labour members of the Commons treasury committee said: “We just had a referendum result that was a rejection of elites, and anyone who can arrange their tax affairs in this way is clearly the member of an elite.
“The Treasury committee has embarked on an inquiry into tax avoidance because we have cross-party agreement that this an issue. I wouldn’t have confidence in the government tackling this energetically if it was led by Andrea Leadsom.”
The Labour MP Angela Smith added: “Andrea Leadsom has been rather late in declaring her hand in this leadership contest and one can only wonder whether it is because of her tax arrangements. If she wants to be Prime Minister she needs to come clean with the electorate about where she stands on all this.”
Mrs Leadsom resigned her directorship of Bandal in February 2014, shortly before her appointment as a treasury minister, and was replaced by her 18 year old son.
None of these financial transactions, devices commonly used by wealth people to minimise their tax liabilities, was illegal. When the facts were first reported in The Independent, Mrs Leadsom’s spokesperson said: “This is a normal corporate situation and all tax that is due is being paid. None of the loans for the properties are based offshore.”
She told her local paper, the Northampton Chronicle, at the time: “Bandal Ltd is a totally UK company that is eligible for tax on all its profit. There is no offshore element of Bandal Ltd and there are no tax avoidance schemes."
She added: “I have paid tax on absolutely everything I have earned with the only exception being the year I worked for Barclays in Sydney, Australia.”
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