• News

Ecclestone avoided potential £1.2bn in tax

ESPN Staff
April 28, 2014 « De Silvestro completes first Sauber test | Wolff expects advantage to switch between Hamilton and Rosberg »
Bernie Ecclestone with his ex-wife Slavica © Sutton Images
Enlarge

Bernie Ecclestone avoided a potential £1.2bn tax bill after his ex-wife made a £10m deal with UK tax authorities, according to BBC current affairs programme Panorama.

The programme, set to be aired in the UK on Monday night, claims it "may be the biggest individual tax dodge in British history". Panorama's investigation goes back to the mid-1990s when Ecclestone acquired F1's TV rights and gave them to his then wife, Slavica. She transferred them into a family trust in Liechenstein before they were sold on at a vast profit, which Ecclestone was not liable to pay tax on. Providing Ecclestone did not set up or control the trust the deal is "legally watertight", but Ecclestone has admitted he could have faced a tax bill of £1.2bn if he had.

The Ecclestones' tax affairs were investigated by HMRC for over nine years, with the £10m deal being struck in 2008. The BBC quotes one of the lawyers who helped run the family trust, Frederique Flournoy, as saying: "In summer 2008, the Inland Revenue offered to conclude the matter if we paid £10m. We decided to pay up."

Much of the Panorama investigation appears to be based on transcripts of interviews conducted by a German public prosecutor investigating Ecclestone. According to Flournoy's evidence, the Ecclestone family trusts earn around £10m in interest every six weeks. Flournoy also told the German prosecutor that although Ecclestone does not receive payments from the trusts, he does receive divorce payments of "around $100m a year" from his ex-wife Slavica.

"She is paying me an amount of money she has," Ecclestone told the Guardian. "It is all absolutely legal and straightforward without any ifs or buts. I am divorced from her, not the trust. I have unfortunately nothing to do with the trust."

A lawyer for the family trusts reiterated that Ecclestone has no control over the management of the trusts and also said there were errors in the transcripts from the German prosecutor.

Ecclestone insists he is "proud" to pay British taxes and said he paid more than £50m in tax last year.

© ESPN Sports Media Ltd.

Feeds Feeds: ESPN Staff

Products you might like at espnshop.co.uk

    ESPN Staff Close