The British Royal family’s use of offshore tax havens has been exposed in the Paradise Papers, with the latest revelation showing Prince Charles’s estate investing through a friend into a forestry company in Bermuda.
Earlier this week it was revealed the Queen’s personal estate had committed more than £10 million through tax havens, with some of her money ending up invested in a UK hire purchase company accused of predatory lending.
The Royals’ use of tax havens has been questioned by a spokesman for Tax Justice Network Australia, Mark Zirnsak.
There is no suggestion of wrongdoing in the investments made by the Queen or Prince Charles, who voluntarily pay tax on the income from their estates.
But Dr Zirnsak said legitimate uses of tax havens could come at a high cost to reputations given illegal and unethical uses of offshore tax shelters that include tax evasion, fraud, money laundering and concealing assets.
“It will have sullied her reputation, definitely … even if everything is above board, it just does not look good,” Dr Zirnsak said.
“It would have been much better to put your money somewhere where it’s been managed and invested with a reputable firm, where it’s all transparent and you’re very clear what you’re willing to invest and what you’re not.
“To get yourself connected in these tax havens and these secrecy arrangements is not a good look.”
Dr Zirnsak said secrecy was sometimes a motive behind well-known people investing through tax havens.
The revelations have exposed more information than was previously available about the Royal family’s investments through their private estates, and revealed for the first time their use of funds in offshore tax havens.
Company kept Prince’s identity secret
In the latest revelation, leaked documents show Prince Charles’s personal estate invested in a company in Bermuda called Sustainable Forestry Management that is associated with one of his oldest friends, Hugh van Cutsem.
The documents show the Prince’s personal estate, the Duchy of Cornwall, was introduced to the fund by van Cutsem, an old Cambridge University friend of the Prince.
The company also agreed to keep the Prince’s investment of about $130,000 secret.
A February 2007 board minute noted: “The Chairman thanked Cutsem for his introduction of the Duchy of Cornwall and asked and the Board unanimously agreed that the subscription by the Duchy of Cornwall be kept confidential except in respect of any disclosure required by law.”
By 2008, the Prince’s estate had sold the shares for about $425,000.
Cutsem was an officer and shareholder in the company, which appears to have been set up to profit from increased trade in emission offsets by buying forests and other land across the globe, attracting high-profile investors.
But its plans came to grief in the global financial crisis, and it was eventually liquidated in 2011.
The Duchy of Cornwall’s other investments shown in the Paradise Papers, a leak of 13.4 million documents examined by Four Corners in partnership with the International Consortium of Investigative Journalists, include two limited partnership private equity funds headquartered in the Cayman Islands.
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