David Cameron publishes tax return information
David Cameron has become the first Prime Minister to publish information on his income, but he faces further questions over two gifts of £100,000 he received from his mother.
Mr Cameron was forced into the move after a week of scrutiny about his financial affairs, culminating in the revelation he sold £30,000 worth of shares in a Bahamas-based fund in 2010.
Yesterday he admitted he “should have handled this better” and overnight he published information on his taxable income back to 2009/10.
Alongside his prime ministerial salary of over £140,000, Mr Cameron’s income is boosted by his half of the rent on the family home, which has brought in between £45,000 and £48,000 for the last three years.
His overall income of £200,307 in 2014/15 comprised his salary, rent income, £3,000 from interest, and £9,834 of taxable expenses from the Conservative party. He paid £75,898 in income tax last year.
The fact his income was higher than £150,000 means he benefitted from the Coalition Government’s decision to reduce the top rate of tax from 50p to 45p, meaning his tax bill was approximately £2,500 lower.
The £9,500 profit on his half of the share sale was beneath the capital gains tax limit at the time.
Accountancy firm RNS explained that Mr Cameron’s tax payments varied slightly due to the handling of the £20,000 tax-free deduction available to the Prime Minister.
Mr Cameron received the deduction in 2010/11, cancelled it out in the next three years by declaring the same amount as taxable, and waived it altogether in 14/15.
Downing Street has also revealed information about the Prime Minister’s inheritance. He received £300,000 on the death of his father in 2010.
Alongside that, Mr Cameron’s mother gave him two gifts of £100,000 in May and July 2011 in order to balance out Ian Cameron’s inheritance among her children.
The money from his mother will not be subject to inheritance gains tax unless she dies within the next two years, but a source close to the Prime Minister rejected any suggestion that the gifts amount to a tax “dodge”.
“This is the kind of sensible, perfectly legal and proper tax planning that millions of ordinary people do,” the source told the Mail on Sunday.
If the inheritance had been handed down in a single payment of £500,000 instead of as £300,000 plus the gifts, the Prime Minister would have had to pay approximately £70,000 in inheritance tax.
To go alongside the news about his tax affairs, Mr Cameron has announced today the creation of a new taskforce to investigate the so-called ‘Panama Papers’.
The new group will receive £10m funding and will be jointly led by HMRC and the National Crime Agency. It will also work with experts in the Serious Fraud Office and Financial Conduct Authority.
“The UK has been at the forefront of international action to tackle the global scourge of aggressive tax avoidance and evasion, and international corruption more broadly,” he said in a statement.
“There is clearly further to go and this taskforce will bring together the best of British expertise to deal with any wrongdoing relating to the Panama Papers.
“This world-class operation will report to the Chancellor and the Home Secretary on their strategy for taking action later this year, when we will update Parliament.”
Shadow Chancellor John McDonnell said the taskforce was a “non-runner” as long as it had to report to George Osborne and Theresa May.
He said: “The Prime Minister must be challenged on this unacceptable proposal. Any inquiry must be fully independent and in public.
“Having this proposed task force reporting to the Chancellor and Home Secretary, who are members of a political party whose donors are implicated, is a non-runner.
"The Government’s inadequate plans will fail to win back the trust of the public.”