Lord Ashcroft May Sell Belize Bank

by Jason Gorringe, Tax-News.com, London

21 August 2001

The Tory Treasurer, Lord Ashcroft, has once again made headlines with the news that he plans to sell the offshore financial services operation which has been the source of a public feud with International Development Secretary, Clare Short.

The Guardian newspaper has reported that Lord Ashcroft's decision to sell his financial operation, which includes the Belize Bank, was quietly disclosed in his company accounts. Published at the weekend, the statement simply read: 'The financial services business is non-core and a candidate for disposal at some future date.'

However, the newspaper continues to suggest that although Lord Ashcroft intends to remove ownership of the Belize Bank from his 'stock market-listed vehicle,' there is a possibility that he could retain ownership through his network of private off-shore companies. This is would be of no surprise to many as Lord Ashcroft's history of emloying complex accounting methods to transfer his assets between his private and public companies is well known.

Britain has informed Belize that it will write-off £13.7m in debt if Belize reforms its tax laws, but the dispute between Clare Short and Lord Ashcroft could threaten this agreement. The row erupted in June this year when Ms Short attacked Lord Ashcroft's tax free status in Belize. It appears that in a series of calculated 'leaks' just before the national election, Ms Short revealed her intentions to press Belize to rescind the tax-privileged status of his companies there with the argument that Britain should not have to cancel debt repayments due from Belize if it is consciously allowing tax to go uncollected - the tax concession employed by Lord Ashcroft in Belize has saved him from paying out millions of pounds.

The argument has snowballed. Lord Ashcroft, who will now step down from his post as Tory Treasurer, has claimed that Clare Short's attack towards him was part of a political 'dirty tricks' campaign in order to undermine the Tories, and he has issued writs against Ms Short claiming that she has deliberately attempted to sully his reputation.

The Belize Bank proved to be Lord Ashcroft's most lucrative business last year with an income of around £14 million ($20 million). The Guardian says it has documents in which the US Drug Enforcement authority alleges that Belize's tax haven 'created to provide tax shelters for companies owned by Ashcroft,' has been exploited by money launderers. This accusation has been fiercely denied by the Tory peer and indeed there appears to be no concrete evidence to imply otherwise.

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