Queen Elizabeth Stashed Millions in Offshore Tax Havens: Paradise Papers

Queen Elizabeth's estate reportedly invested at least $13.1 million into offshore tax-sheltered funds located in the Cayman Islands and Bermuda, prompting Labour Party leaders and anti-monarchists to demand an investigation into Her Royal Highness's finances.

The queen's private fund, The Duchy of Lancaster, invested just under $10 million and became a limited partner of The Cayman Islands' "Dover Street VI Fund" in 2005. The duchy also invested close to $5 million into nontaxable funds in Bermuda, according to documents released as part of a global investigation called "The Paradise Papers." 

Together, The Queen is dodging nearly $15 million in taxes on her $680 million duchy—and British politicians are livid.

“Anybody who is putting money into tax havens should do two things: not just apologize for it, but recognize what it does to our society,” Labour Party leader Jeremy Corbyn said.

His colleague, Member of Parliament Margaret Hodge, reserved her anger for the queen's advisers. “It is so obvious that if you are looking after the money of the monarchy that you’ve got to be cleaner than clean, and you must never go near the dirty world of tax avoidance or making money in dubious ways,” she said.

Corbyn insisted on a full investigation into the queen's offshore tax havens. Prime Minister Theresa May of the Conservative Party told reporters that an investigation is underway.

Anti-monarchist groups are taking a hard-line view and blaming the queen herself. 

“The queen is responsible for her investments; she should have instructed her advisers to ensure her money was invested ethically and that there was no tax-dodging involved,” said Graham Smith, CEO of The Republic Campaign, which seeks to replace the monarchy with an elected head of state. “The queen’s personal wealth and investments mean she has a direct interest in government decisions about tax. Yet we have no way of knowing if undue influence has been used by the royal household to protect these investments.”

It's not as if Her Majesty is hurting for money. Queen Elizabeth receives $97 million each year in tariff-free money funded by British taxpayers. But one of her offshore investments has generated particular controversy and embarrassment for the royal family. 

Documents reveal that a percentage of the queen's tax-sheltered money was invested in a rent-to-own company that supplied household goods like TVs and washing machines to poor consumers at very high interest rates. In October, British regulators fined the firm, called BrightHouse, $20 million for overcharging customers and purposely targeting customers with mental health problems and learning disabilities.

Representatives of the queen's estate said that all investments were legal and that less than 1 percent of the funds were held in the Cayman Islands. The queen does not personally manage the portfolio and voluntarily pays taxes on income she earns from the estate.

The queen’s estate, a private fund known as the Duchy of Lancaster, is worth about $680 million. Queen Elizabeth, who also holds the title of Duke of Lancaster, earned $25 million from the fund last year.

The duchy was created in 1265 by the Duke of Lancaster to provide the monarch of England with a salary beyond the annual sovereign grant of $97 million in tax-free income. It is managed by a group of advisers and is a diversified portfolio of land, property and other assets. The offshore investments were previously undisclosed.

The papers revealed information about companies and people who have sheltered wealth in the secretive tax havens of Britain’s offshore empires. U.S. Commerce Secretary Wilbur Ross was snared by the papers for doing business with a close relative of Russian President Vladimir Putin. 

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