F1 CEO Bernie Ecclestone Denies Settling HMRC Investigation With $16.8M
F1 CEO Bernie Ecclestone "has denied accusations that he avoided a potential tax bill" of more than £1B ($1.6B) by settling a long-running investigation by U.K. tax authority HMRC into his affairs for £10M ($16.8M), according to Sean Farrell of the London GUARDIAN. In a BBC Panorama program to be broadcast on Monday night, "it is claimed that HMRC investigated the Ecclestone family's tax affairs for nine years" before offering to settle for a £10M payment from the family trusts in '08. The program said that "the trusts make that much in interest every six weeks." Ecclestone said that "the payment was not a settlement to call off the investigation and that it was instead the amount HMRC found he had underpaid in tax." Ecclestone: "The Revenue investigates you and if they find out something is wrong they say, 'This is wrong and you should have paid this amount' and you pay it" (GUARDIAN, 4/28). The BBC reported Panorama's investigation goes back to '95 when Ecclestone "secured ownership of the lucrative TV rights of Formula 1." Shortly afterward "he moved this prize asset offshore, giving the rights to his then wife, Slavica." She transferred them to a family trust in Liechtenstein, "before selling them for a huge profit," free of U.K. tax. It "may be the biggest individual tax dodge in British history," and is legally watertight provided Ecclestone did not set up, or control, the trust. Barrister and tax expert Jolyon Maugham said this was a "pretty substantial" loss of tax. Maugham: "I'm certainly not aware of anything else remotely approaching that sort of magnitude, in my fairly extensive experience" (BBC, 4/28). In London, Martin Evans wrote Ecclestone claimed that "he had given away his fortune to avoid inheritance tax laws which he considered unfair." Swiss lawyer Frederique Flournoy disclosed details of the regular payments to Ecclestone from his ex-wife "and also revealed that the HMRC had reached a secret deal with the motor racing boss." In a statement, a lawyer for the Ecclestone family trusts said, “Mr Ecclestone has not exerted, and has never sought to exert, any control over the management of the trusts" (TELEGRAPH, 4/28).