For any general inquiries, please fill in the following contact form:

Our websites never use cookies or other technologies such as pixel tags and web beacons. We only retain personal information when the contact section of our websites is filled. To proceed and get in touch with us through this format please read our Terms & Conditions, updated to be in line with the provisions of the GDPR, and tick this box to consent in us retaining the above information for contacting purposes only.


Tory ex-minister who defended tax avoidance has Bahamas trust fund

Tory ex-minister who defended tax avoidance has Bahamas trust fund


Revelation about Lord Sassoon in Paradise Papers raises questions about why peers are allowed to keep family trusts secret

The former Treasury minister James Sassoon is a beneficiary of a Bahamas trust fund that has sheltered a family fortune worth hundreds of millions of dollars from tax since 1957.

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.”

Baron 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 has “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”.

Quick Guide

Key revelations from the Paradise Papers

1) Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund – and some of her money went to a retailer accused of exploiting poor families and vulnerable people.

2) Extensive offshore dealings by Donald Trump’s cabinet members, advisers and donors, including substantial payments from a firm co-owned by Vladimir Putin’s son-in-law to the shipping group of the US commerce secretary, Wilbur Ross.

3) Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions.

4) The tax-avoiding Cayman Islands trust managed by the Canadian prime minister Justin Trudeau’s chief moneyman.

5) Formula One champion Lewis Hamilton avoided taxes on £17m jet using Isle of Man scheme.

6) A previously unknown $450m offshore trust that has sheltered the wealth of Lord Ashcroft.

7) Apple secretly moved parts of empire to Jersey after row over tax affairs.

8) How sportswear giant Nike stays one step ahead of the taxman.

9) The billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts.

10) Offshore cash helped fun Steve Bannon's attacks on Hillary Clinton.

10) The secret loan and alliance used by the London-listed multinational Glencore in its efforts to secure lucrative mining rights in the Democratic Republic of the Congo.

11) The complex offshore webs used by two Russian billionaires to buy stakes in Arsenal and Everton football clubs.

12) Stars of BBC hit sitcom Mrs Brown's Boys used web of offshore companies to avoid tax.

13) Ex-minister who defended tax avoidance has Bahamas trust fund.

Secrecy surrounds the trusts held by British taxpayers. They can be established anywhere in the world, and unlike companies, many do not have to be recorded on any central register. The only papers proving they exist are held by the beneficiaries, their trustees and their advisers.

Last month, the government voted down Labour amendments to the finance bill, which would have forced the UK beneficiaries of overseas trusts to declare their sources of property and income on a public register.

Sassoon said he was “not going to be drawn” on whether the trust itself has ever paid British taxes on its assets. He said the trust was fully disclosed to HMRC. Many overseas trusts are not liable for tax, even if some of their beneficiaries live in Britain. They are able to avoid the 40% death duties paid by most British citizens, and the 10-yearly charge paid in lieu of inheritance tax by many trusts.

The peer said the arrangements did not involve moving assets offshore. His grandmother had a London address – but Sassoon said she was not tax-domiciled in Britain, and the trust was set up to manage non-UK assets for a family originating outside the country. The potential beneficiaries were not necessarily tax resident in the UK.

Sassoon said he has at all times complied with the House of Lords register of interests and disclosure rules. During his period as a minister all his financial interests were placed in a blind trust, he explained, in accordance with cabinet office rules. Lords rules do not require the registration of assets held in blind trusts.

Sassoon added: “Full disclosure of the trust has been made since inception to the Inland Revenue and HMRC, including sending them annual accounts on a voluntary basis. Distributions from the settlement have been disclosed and tax paid in the normal way. I have not received any benefit from the settlement for more than 25 years.”


Danske Bank investors seek $475 million in damages over money laundering scandal

Danske Bank investors seek $475 million in damages over money laundering scandal
COPENHAGEN (Reuters) - Two U.S. law firms have filed a lawsuit against Danske Bank on behalf of institutional investors over a 200 billion ...

ING Italy investigated over alleged money laundering - source

ING Italy investigated over alleged money laundering - source
MILAN (Reuters) - Prosecutors in Milan have begun a formal investigation into alleged money laundering involving Dutch bank ING Groep NV’s ...

Bankers should pay their fair share of tax for society’s sake

Bankers should pay their fair share of tax for society’s sake
The fact that more than 3,500 UK-based bankers earn over €1m, at a time when callous austerity policies are still causing hardship and the ...

Who's behind the blog

Who's behind the blog