Newly-leaked documents reveal the private estate of Britain’s Queen Elizabeth has invested millions of pounds in the British Caribbean tax havens of the Cayman Islands and Bermuda.
According to documents obtained by the International Consortium of Journalists, around 10 million pounds (13 million dollars) of the queen’s private cash is said to have been tied up in offshore portfolios.
The leak, dubbed the Paradise Papers, contains 13.4 million documents, mostly from one leading firm in offshore finance. Nearly 100 media groups are investigating the leaked papers.
The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year-old company, whose clients are corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars.
Many of the leaked documents reveal how politicians, multinationals, celebrities and high-net-worth individuals use complex structures of trusts, foundations and shell companies to protect their cash from tax officials or hide their dealings behind a veil of secrecy.
The files show the offshore empire is bigger and more complicated than many had imagined.
What are the offshore tax havens?
Essentially the tax havens are places outside a country’s regulations, to which companies or individuals can redirect money, assets or profits to take advantage of lower taxes rates than their own country.
These jurisdictions are known as offshore tax havens, to use the more technical jargon, offshore financial centers (OFCs). They are generally stable, secretive and reliable, often small islands but not exclusively so, and can vary on how rigorously they carry out checks on wrongdoing.
Britain has a big role in the flourishing of these entities, not simply because so many of its overseas territories and crown dependencies are OFCs, but many of the lawyers, accountants and bankers working in the offshore industry operate out of the city of London.
Who hides the cash?
Wealthy individuals and large companies have one thing in common: enormous amounts of money they want to hide from taxing.
Some of the world’s biggest multinationals feature in the leak, including Apple, Nike and Facebook, as well as some of the richest people in the world, from the British monarch to Bono, and from the stars of British sitcoms to the stars of Hollywood.
Brooke Harrington, renowned author of Capital Without Borders: Wealth Managers and the One Percent, said offshore finance is not for the 1 percent but the .001 percent.