David Cameron slams 'hurtful' allegations about family's finances after Panama Papers

British Prime Minister David Cameron has lashed out at "deeply hurtful and profoundly untrue" claims made about his late father's financial arrangements.

PM says father's offshore firm was for investment purposes, not tax evasion

Britain's Prime Minister David Cameron spoke in the House of Commons Monday, saying his late father set up an offshore firm for investment purposes, not tax evasion. (Stefan Wermuth/Reuters)

British Prime Minister David Cameron has lashed out at "deeply hurtful and profoundly untrue" claims made about his late father's financial arrangements.

Cameron has been under mounting pressure since his father, Ian Cameron, was identified as a client of a Panamanian law firm that specializes in helping the wealthy reduce their tax burdens. Cameron initially refused to say whether he had a stake in an offshore firm established by his father, before acknowledging he had sold his shares in it shortly before he became prime minister in 2010.

Speaking in the House of Commons, Cameron said his father set up an offshore firm for investment purposes.

He said the firm, Blairmore Holdings, was set up following "an entirely standard practice and ... not to avoid tax."

'Standard practice,' says Cameron

However, Cameron defended his actions, saying the fund was registered "from the beginning."

"It was properly audited and the annual return was submitted to revenue every year. The share price was listed in the Financial Times," he told parliament. 

He also said it was not a family trust but a commercial investment fund that any investor could buy units in, and then pay taxes on its dividends.

He said the fund was set up offshore because it traded in dollar securities. 

"So, like any other, it made sense to be set up inside one of the main centres of dollar trading."

Protesters have been calling for Cameron's resignation after he admitted last week that he used to have shares in his late father's Panamanian trust. Cameron says he sold the shares, which were legal to own, in 2010. (John Stillwell/Associated Press)

Cameron said he accepts the criticisms that he should have responded more quickly but said he was angry at the way his late father's memory was being "reduced."

He defended his father, who he said was a hard-working man. Ian Cameron died in 2010.

$366,500 Cdn tax-free gift

Revelations about the Cameron family finances — found among more than 11 million documents from the law firm Mossack Fonseca — have overshadowed the government's claim that it is committed to closing tax loopholes.

The prime minister, a former PR man with a reputation for sharp political intuition, appeared to be caught off-guard by the issue. His office initially insisted that his financial arrangements were private, before acknowledging that Cameron and his wife had sold some 30,000 pounds (about $57,000 Cdn) in shares in the offshore fund shortly before he became prime minister in 2010.

On Sunday, Cameron published a summary of his tax returns since 2009, becoming the first British leader to do so. The records appear to show that Cameron paid his full share of tax — 75,898 pounds (about $130,000 Cdn) on taxable income of 200,307 pounds (about $370,000 Cdn) in the most recent tax year.

But the document also generated a new round of headlines over a 200,000 pound (about $366,500 Cdn) gift from his mother on which Cameron — legally — paid no tax.

Cameron said publishing his tax information had been "unprecedented, but I think it is the right thing to do."

He said others who aspired to be prime minister or control the country's finances should follow suit. But he said extending compulsory tax disclosure to all lawmakers would be "a very big step," and one he did not support.

Opposition leader publishes tax records

Treasury chief George Osborne and opposition leader Jeremy Corbyn both published details of their own tax returns Monday.

So did London Mayor Boris Johnson, revealed to have paid almost 1 million pounds ($1.8 million Cdn) in tax over the last four years.

The tax spat could have repercussions for Britain's June 23 referendum on European Union membership. Cameron is the leading proponent of staying in the EU, and anything that tarnishes his brand could undermine that campaign.

In Britain, the Panama Papers sparked a furor shot through with the national obsessions of privilege and class.

Conservative lawmaker Alan Duncan accused the prime minister's critics of hating "anyone who's even got a hint of wealth in their life."

But Labour leader Corbyn said the Panama Papers had "driven home what many people have increasingly felt — there is now one rule for the super-rich and another for the rest."

"I'm honestly not sure that you fully appreciate the anger that is out there over this injustice," he told Cameron.

Parliamentarian Dennis Skinner got in trouble in the House of Commons for referring to the prime minister as "Dodgy Dave," saying Cameron would not give a straight answer to his questions about his offshore dealings.

The Speaker gave the 84-year-old Skinner the opportunity to withdraw his comment. Skinner did not, and was kicked out for the rest of the day.

with files from the CBC's Laura Wright