Key Miliband backer in offshore tax row: Labour donor transferred shares to Liechtenstein and Jersey and later sold some for reported £37 million

Sir David Garrard transferred shares offshore before some were later sold
The tycoon has given the Labour Party more than £1.2million
Ed Miliband attacked ‘dodgy Tory donors’ for having off-shore accounts
Sir David held accounts in Liechtenstein and Jersey according to reports
By GLEN OWEN FOR THE MAIL ON SUNDAY

Ed Miliband’s attack on the tax arrangements of Tory donors took a new turn last night when it emerged that one of his own backers had millions of shares in an offshore trust.

Sir David Garrard, who has given more than £1.2 million to Labour, transferred shares to Liechtenstein and Jersey, some of which were later sold for a reported £37 million.

The disclosure comes after Mr Miliband denounced ‘dodgy Tory donors’ and named City tycoon and Conservative backer Lord Fink as one of those with Swiss accounts with the controversial HSBC bank.

But last night the focus was back on Labour’s backers after company returns showed details of Sir David’s multi-million-pound business background. In 1995, seven years after he founded property company Minerva, he transferred more than 16 million of its shares to a

Liechtenstein firm acting on behalf of his family trust, with a further 1.8 million shares going to a trust company in Jersey.
When Sir David retired as chairman of Minerva in 2005, it was reported that his family trust sold 13.4 million shares in the company, leading to a huge windfall for them.

Shortly afterwards, Sir David was contacted by Tony Blair’s fundraiser Lord Levy, who persuaded him to loan the party £2.3 million. He then became embroiled in the ‘cash for peerages’ row after being nominated for the honour in the same year – a move which was dropped in the ensuing furore. Sir David has gifted £690,000 to Labour while Mr Miliband has been leader.

Sir David, 75, who has an estimated £100 million fortune, moved to Switzerland with his wife Maureen following his 2005 retirement, taking up permanent residency in a Geneva hotel suite, although he agreed to resume paying UK tax when the offer of a peerage was made months later.

A leading tax expert told The Mail on Sunday: ‘Putting company shares offshore is one way to maximise the chance of legally avoiding tax when they are disposed of at a future date. There is no way of telling whether Sir David took advantage of this’. Last night, a spokesman for Sir David stressed that there was ‘no irregularity or impropriety in the conduct of his financial affairs’ and ‘all of his financial affairs have been conducted in the full view and knowledge of the UK tax authorities’.

A source added that the Garrard family had benefited from the 2005 shares windfall, not Sir David.

Labour said: ‘All our donations are declared and published in line with Electoral Commission rules.’

Yesterday Mr Miliband accused the Coalition of ‘shrugging its shoulders’ on tax avoidance. However, the Tories hit back, saying the last Labour Government should be held responsible for the level of avoidance.

‘The culture and practices of HMRC went wrong under Labour – when top bankers paid lower tax rates than their cleaners, foreigners didn’t pay capital gains tax and the richest people routinely avoided paying stamp duty,’ said a spokesman.

In a further development, a former Conservative Trade Minister at the centre of the HSBC row stood down from his role at the financial industry lobbying group TheCityUK.

Lord Green, the former chairman of HSBC, headed the bank during the period when staff at its Swiss operation appeared to be helping British customers to avoid tax.