An investigation by the Guardian has revealed close links between a Conservative MP and two companies based in a tax haven.
Nadhim Zahawi has financial ties to Balshore Investments and Berkford Investments, which operate from a lawyers’ office in Gibraltar. He does not declare a connection to either company on the MPs’ register of interests.
Balshore Investments holds shares worth over £20m in YouGov, the polling firm co-founded by Zahawi in 2000. YouGov company documents have referred to Balshore as “the family trust of Nadhim Zahawi’s family”.
Under parliamentary rules MPs have to declare any shareholding valued at more than £70,000, including those owned through a trust. The Stratford-upon-Avon MP did not answer questions over whether he was a beneficiary of a trust and said that everything had been correctly declared in the MPs’ register of interests.
Asked if he had received any payments from Balshore, Zahawi said: “All of my business interests were properly dealt with and declared from 2000. That includes my family.”
On at least one occasion, Zahawi took out a loan from YouGov. When he was due to repay the loan, the money was removed from a dividend due to be paid to Balshore.
A 2005 company document noted that “a portion of the ‘A’ dividend was attributable to Balshore Investments Limited, an overseas company, and has been applied to reduce the current account balance of Nadhim Zahawi”.
According to Balshore’s company filings in Gibraltar, its shares are held by T&T Nominees, and one of the company’s directors is Nadhim Zahawi’s father. T&T Nominees also holds the shares of a second company called Berkford Investments. In 2011 Berkford Investments loaned Zahawi money so that the MP and his wife could buy a livery yard in Warwickshire.
Zahawi said that he had received no further loans from Berkford: “I have no involvement with any decision-making process by Berkford Investments. All of my financial interests are declared in the register of members’ interests.”
According to land registry documents, Berkford Investments owned five other properties in the UK in May 2013 but had sold them by December 2014. Zahawi, a former aide to Jeffrey Archer, has embarked on a series of property purchases, including a £13.75m house in one of the most exclusive areas of London in 2013. He has spent more than £10m on commercial property through Zahawi & Zahawi, a company he co-owns with his wife, in the last 18 months.
As an MP, Zahawi earns £74,962 a year. He also earns £241,500 a year from the Kurdish oil company Gulf Keystone, on top of regular bonuses. He is paid a further £40,000 a year by the recruitment company SThree. The Guardian recently revealed that he could make £1.5m if Gulf Keystone is sold in the near future.
Zahawi & Zahawi also receives payments from YouGov and a steel manufacturing company called IPBD, which has been operating in Iraq since the war in 2003 and was set up by Zahawi’s father.
Berkford and Balshore are managed by Gibraltar-based T&T Management Services, which handles trusts and assets for “wealthy individuals and families”.
When YouGov was set up in 2000, two of the biggest shareholders were Balshore Investments and Stephan Shakespeare, who co-founded the company.
On its website, T&T points out that under Gibraltar law there is “no charge to tax on the receipt by a Gibraltar company of dividends from any other company regardless of where the latter is incorporated”.
Last year Balshore received around £112,000 in dividends from YouGov. The current tax on dividends for higher rate taxpayers in the UK is 32.5%. There is also no liability to tax on dividends paid by a Gibraltar company to a person who is not resident in Gibraltar.