Anybody watching the news last night could have been forgiven for thinking the political headline was that Lord Fink had threatened to sue Ed Miliband for calling him a tax avoider, rather than that David Cameron had avoided answering any questions on the more serious connection between tax avoidance and donations to the Conservative Party.
As this blog reported yesterday, Mr Miliband said to Cameron (during Prime Minister’s Questions): “Let us take Stanley Fink, who gave £3 million to the Conservative party. The Prime Minister actually appointed him as treasurer of the party and gave him a peerage for good measure. Will he now explain what steps he is going to take about the tax avoidance activities of Lord Fink?”
Cameron didn’t answer but Lord Fink threatened to sue the Labour leader, challenging him to repeat the tax avoidance claim outside the House of Commons in a place where he couldn’t claim Parliamentary privilege of exemption from such legal action.
This was a very silly move as we all know tax avoidance isn’t actually illegal. As a former Conservative Party treasurer, Fink should know this.
Presumably somebody turned up to give him some proper advice overnight, as he has now changed his tune, admitting he took “vanilla” tax avoidance measures.
In an interview with the Evening Standard, he tried to justify it by saying: “The expression tax avoidance is so wide that everyone does tax avoidance at some level.”
Is that right? Isn’t there a difference, though, between the cash-in-hand activities of the man on the street and the kind of bank-aided deception described in the HSBC scandal?
What’s the morality of tax avoidance that provides somebody with the spare cash to make a massive donation to a political party and receive a job and a peerage in return?
According to The Guardian, Fink said he “used the opportunity … to set up some simple family trusts” while on a four-year posting to Switzerland. He transferred some shares to his children and his wife.
“Really what I was trying to do was, not like a living will, but to allocate a very small shareholding to each of my children so they could pay deposits on houses in London one day after we returned. There was nothing complex and they weren’t aggressive tax planning.
“I chose the mildest end of the spectrum that I was advised on,” he said. “What I did … was at the vanilla, bland, end of the spectrum.
“My family and I paid tax on all the dividends, both in Switzerland and the UK. They were done because my children were under 18 and I wanted them to have something to help them make their way in the wider world.”
Lord Fink is a multi-millionaire. It is unlikely that his children will ever be short of a few bob.
Meanwhile, one is left to wonder how many ordinary working people Fink believes get this kind of tax advice from their own bankers.
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