The panama Papers

Yorkshire Blue said:

There's nothing wrong with BBC links!

OK, a very quick and simplified overview of trusts (it's one of the most complicated areas of law) are that there are 3 main parties to them.

The Settlor, the Trustees and the Beneficiaries. The Settlor creates a trust by transferring the assets (known as the trust property) to the Trustees. The Trustees then become the legal owners of the trust property but don't get the benefit of it, but instead have to manage it in accordance with the law and any terms of the trust set out by the Settlor for the benefit of the Beneficiaries, the Beneficiaries being either a person, a class of people (all my descendants) or a specific purpose (the promotion of football in South East Essex or whatever it was that the Trust had as their purpose).

You're probably already thinking this is outrageous, but it's a very useful legal device that developed out of the law of equity (so based on fairness) and is common in wills, divorces or if people are incapacitated or are too young to make decisions or just for protecting consumers. If an insurance broker goes bust it means that the insurance premiums paid by the client are protected so aren't part of the insurance broker's assets and can't be claimed by the insurance broker's creditors causing the insurance cover to be lost and the factory will still be covered if it burns down. Lord Denning was a big fan of trusts and used resulting trusts and constructive trusts in a series of imaginative decisions to make sure the law come up with the 'right' verdict. This a little more complicated as the trusts are overseas so aren't under English law. I think the advantage to choosing Panama for the Trusts is that there's no Rule against Perpetuities, but I'll leave Barna to explain what that's about.

In this case what has almost certainly happened is that Daddy Cameron is the Settlor and created a trust, possibly in his will, by transferring shares in his company to the Trustees. It will almost certainly be a discretionary trust in which the Trustees can choose how to apply it to a class of beneficiaries but no Beneficiary has a right to it. So David Cameron has no ownership of the trust assets - these are owned by the Trustees, but the Trustees can decide how to apply it in accordance with the trust settlement (eg they might decide to use it to pay baby David's Eton school fees, buy a house for an older sister or pay for the best medical care money can buy for the Settlor's grandson Ivan).

So Barna is asking David Cameron to come clean about assets he doesn't own, control or manage on the basis that he might be a beneficiary if the Trustees, of which David Cameron has no control, so decide because he's a member of a group of people who might be entitled to benefit should the Trustees deem it appropriate. For the Beneficiaries, think SUFC. For the Trustees, think SUSCT. The SUSCT may decide to loan money to SUFC if their members vote to do so, but SUFC has no right to expect SUSCT to do so. Meanwhile I think Barna wants SUFC to pay tax on SUSCT's assets or something nonsensical like that.

I did warn you it was boring.

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Tangled up in Blue said:

Why shouldn't Cameron pay tax on a trust fund set up in a foreign tax-haven,which he and his family have benefited from,especially if the fund wasn't declared to HMG in the first place?

Cameron is on dodgy ground here and this issue is likely to overshadow the rest of his time at number 10.

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Tangled up in Blue said:

As you say your account is "dull" and "boring".There's a much better one here.http://www.theguardian.com/world/20...anking-and-when-it-is-naughty-to-a-5-year-old

I'm still waiting for the answer to my question about your post,BTW!

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Benfleet A1 said:

At least we now know why you poo poo'ed a perfectly good answer from YB. I'll try and find Janet & John books for you in future with plenty of nice pictures.

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Tangled up in Blue said:

Why shouldn't Cameron pay tax on a trust fund set up in a foreign tax-haven,which he and his family have benefited from,especially if the fund wasn't declared to HMG in the first place?

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londonblue said:

Firstly, that isn't boring, it's actually very interesting, so thanks.

Secondly, that doesn't answer all the questions since Camerscum may well be a beneficiary, even if he doesn't have control over that. The problem here is that a) we don't know, and b) what's to say he can't influence the trustees? Do we know who the trustees are, and how close they are to him and his family?

On a technical point, is it possible for a person to be both a trustee and a beneficiary? Logic would say not, but I'd be interested to know the answer.

Oh, and another thing: Lord Denning was a genius.

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Tangled up in Blue said:

As you say your account is "dull" and "boring".There's a much better one here.http://www.theguardian.com/world/20...anking-and-when-it-is-naughty-to-a-5-year-old

I'm still waiting for the answer to my question about your post,BTW!

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Yorkshire Blue said:

:facepalm:




a) We don't know, but then David Cameron may not know either. We get into difficult ground when trying to force people to account for things they have no right to know. Even if you amend the rules so that they have to disclose what they know, people can then get round that by just not informing the beneficiaries.

b) The Trustees have certain legal responsibilities and restrictions. I expect the Trustees are close to the Cameron family, and whilst David Cameron can appeal to them, they'd have to take into account the interests of the other family members, the trust deed, their duties as trustees etc.

c) Yes, but they'd need to be careful of conflicts of interest with the other beneficiaries. If they were a sole beneficiary it would be a bare trust and the law would basically treat them as the owner. There would usually be at least one independent trustee.

Denning was a brilliant legal mind.

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londonblue said:

So let's make a hypothetical scenario: He and his immediate family (i.e. his wife and kids) are the beneficiaries, and his mother and he are the trustees. I think you can see where I'm going with this. It's because of the lack of transparency (for whatever reason) that questions will continue to be asked.

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