Pandora Papers: Blairs saved $500,000 in stamp duty deal

Czech PM Andrej Babis accused the International Consortium of Journalists of trying to influence his country’s elections on Friday.

Andrej Babis, on an election poster in Brno, did not declare the purchase of a €20m estate on the Cote d’Azur in the south of France. Picture: Getty Images

Former British prime minister Tony Blair and his wife, Cherie, say it is not unusual to buy commercial property using an offshore trust, which saved them paying $500,000 in taxes.

The Blairs are among the dozens of global politicians and wealthy business people whose private dealings have been revealed by the Pandora Papers leak on Sunday.

While using offshore tax havens and loopholes are not illegal in most countries, the papers have in some cases illuminated undeclared property dealings, artworks, yachts and trusts, and posed questions about the source of the monies.

In the Czech Republic, Prime Minister Andrej Babis accused the International Consortium of Journalists – which uncovered the data leak of 12 million documents from 14 financial firms in Cyprus, Panama and Switzerland – of trying to influence his country’s parliamentary elections on Friday. According to the consortium, Mr Babis purchased the lavish €20m 3.8ha Chateau Bigaud on the Cote d’Azur in the south of France a few years ago using shell companies in Panama, the British Virgin Islands, the US and Monaco, but which have not been declared in asset declarations required as a public official.

“I have never done anything illegal or wrong, but that does not prevent them from trying to denigrate me again and influence the Czech parliamentary elections,” Mr Babis tweeted.

The papers show how Azerbaijan President Ilham Aliyev invested €460m in the London real estate market, selling one building to the Queen for a profit of £31m.

Ukrainian President Volodymyr Zelensky transferred his quarter share of a British Virgin Islands company to his top confidant, Serhiy Shefir, shortly before he ran for election in 2019. Mr Shefir, who is now Mr Zelensky’s aide, still retains ownership of the shares, the documents show.

The consortium also claims the papers shed some light on the byzantine maze of money held by various close friends and associates of Russian President Vladimir Putin. One luxury apartment in Monaco was revealed to be owned, through layers of companies, by Svetlana Krivonogikh, rumoured to have been Mr Putin’s girlfriend and the alleged mother of his love child.

Mr Blair, the former Labour leader, had previously spoken out against tax havens, describing them as “a haven of scams, perks, City deals and profits”. He claimed that millionaires with the right accountant pay nothing while pensioners pay taxes on fuel.

When the Blairs bought a $13m property in Harcourt Street, Marylebone, as an office for Ms Blair’s business, they purchased the offshore company that owned it. The building had been owned by Bahrain’s Industry and Tourism Minister, Zayed bin Rashid al-Zayani, within the structure of an offshore real estate company. The Blairs and the al-Zayanis said they did not initially know about each other’s involvement in the deal. “It is not unusual for a commercial office building to be held in a corporate vehicle or for vendors of such property not to want to dispose of the property separately,” Mrs Blair said.

She said the acquisition of a company comes with different tax consequences and the Blairs will be liable for capital gains tax on resale.

Kenyan President Uhuru Kenyatta has been shown to benefit from a foundation registered in Panama, while other family members own five offshore companies with assets worth more than $US30m, according to the records.

King Abdullah II of Jordan purchased three luxury beachfront mansions in Malibu during the time of the Arab Spring for a total of $US68m using offshore companies. His lawyers said the king did not misuse any public money and categorically denied any improper ownership of property through offshore companies.

The papers also show that finance ministers of Pakistan, The Netherlands and Brazil and the former finance ministers of Malta and France, including ex-International Monetary Fund chief Dominique Strauss-Kahn, have links to offshore companies.