Pakistan

Imran admits owning offshore company to ‘avoid UK taxes’

PTI chief clarifies he bought a flat through an offshore firm in 1984 as he was not a British citizen

News Desk May 13, 2016

PTI chairman Imran Khan. PHOTO: FILE

A day after Pakistan Tehreek-e-Insaf (PTI) spokesperson denied that the party chief owned an overseas holding, Imran Khan admitted he formed an offshore company in 1983 during his cricketing years in London.

Speaking to reporters at London Heathrow Airport, Imran said he formed the offshore firm on the advice of his accountant to "avoid UK taxes".

"I was already paying 35 per cent tax on my income there, so to avoid further taxes, I bought the flat through an offshore firm, which was my right as I was not a British citizen," he said, adding, “There is no illegality in it.”

Leaked documents from the Mossack Fonseca law firm in Panama last month showed premier’s children – Hassan, Hussain and Maryam – owned at least three offshore holding companies registered in the British Virgin Islands.

Detractors say no way out for Nawaz

Earlier, the PTI chief, being a critic of the incumbent government, had categorically said, “The only reason people opened offshore accounts was to either hide wealth or evade tax.”

Only reason ppl open offshore accts through Panama is to either hide wealth, esp ill-gotten wealth, or to evade tax or both.
— Imran Khan (@ImranKhanPTI) April 4, 2016

According to the United Kingdom’s official land registry records, Imran’s property – a flat in South Kensington was registered in the name of ‘Niazi Services Limited’ of Jersey, Channel Island, on May 3 1984. The flat was sold in March 2003 for £715,000.

Jersey of Channel Island is one of the havens for offshore companies.

In reaction to Imran’s statement, PML-N leader Maryam Nawaz called the PTI chairman “the pioneer of offshore companies”.

The 'PIONEER' of offshore companies ..... The TRAILBLAZER award goes to Mr. Khan. #Hypocrisy pic.twitter.com/PG2M5O5oAT
— Maryam Nawaz Sharif (@MaryamNSharif) May 13, 2016

COMMENTS (51)

Pak_Patriot | 7 years ago | Reply @H Chaudhry: Accountability starts at the top: the PM. He cannot question others when he is himself questionable and no answers have been provided. Others are not PM nor responsible for the country's finances; they come later.

Pak_Patriot | 7 years ago | Reply @Humza: Panama Papers prove NS and family did not declare assets in the 90s which were owned by these OFCs. That itself is a crime. He also has not been able to show the money trail; whether the money used to setup these OFCs was tax paid, sent legally or not. For someone who is not corrupt, this should be easy. For someone who is, this is a big headache. IK never hid the asset owned by his OFC, the London flat was declared as his. He merely used the OFC to avoid capital gains tax on property which is perfectly legal. Sharifs used their OFCs to hide wealth, evade tax. That is NOT legal.

VIEW MORE COMMENTS

Pak_Patriot | 7 years ago | Reply @rehan: His sister owns a big textile business. Look it up. SKMCH funds are audited yearly by a professional audit firm.

Pak_Patriot | 7 years ago | Reply @H Chaudhry: @rehan: We don't THINK they did corruption, Panama Papers just showed they have not declared all their assets in the 90s. The OFCs were setup in 93/94 and 96. Who from the Sharif family had declared these properties at that time in their asset declarations? When they weren't declared, it's obvious the money transferred to them was not declared either. This means wealth was hidden and tax evaded. THEY have to prove this isn't the case otherwise they are guilty and jailbound. The facts are there; they need to come up with an explanation that exonerates them of wrongdoing.

Pak_Patriot | 7 years ago | Reply @Jee aye Chaudhry: The setting up of OFCs itself is legal but not declaring the assets bought through those OFCs in NOT legal. Sharifs are accused of not declaring assets while IK always declared his flat owned by the OFC as his. Never hid assets. Never evaded taxes. Morality would be a question if he was a UK citizen avoiding tax there. He was a foreigner getting tax deducted income and merely avoided an extra tax, capital gains tax on property. Nothing immoral about it. He didn't avoid any Pakistani tax, the country where he's living.

Pak_Patriot | 7 years ago | Reply @Adnan Naqvi: Paid all due taxes, used a legal way to reduce the amount of taxes due (capital gains tax on property sale). That's called tax avoidance which is 100% legal.

Pak_Patriot | 7 years ago | Reply @Mirza: If you knew about UK tax laws, you'd realise he legally avoided capital gains tax on selling of the property by purchasing and selling it through an offshore company. Nothing illegal or immoral about it. His tweet referred to OFCs made through Panamian law firms. His wasn't. Panama is infamous for providing shelter to shady characters with shady funds.

Pak_Patriot | 7 years ago | Reply @Rex Minor: If you knew how UK tax laws work, you'd realise that buying and selling a flat through offshore companies avoids payment of capital gains tax on selling of the property. What he did was completely and utterly legal and moral as a non-citizen in UK. Your characterization of him clearly shows your biases. He's done more for the country than your leaders ever could or will without ever being the PM. His financial record is impeccable unlike your leaders' who have had books written about their corruption, documentaries made. They never declared the properties owned by their OFCs in the 90s. Now they don't have anywhere to hide because they broke the law. IK had declared his flat, never tried to hide it.

Pak_Patriot | 7 years ago | Reply @Aap ki raay: There is no evasion here. Know the difference between evasion and avoidance. Tax avoidance is a legal way to save money, evasion is a crime. Don't embarrass yourself by posting ill-informed comments.

Pak_Patriot | 7 years ago | Reply @Rex Minor: He was not a UK citizen and did not enjoy the rights and facilities of one. He paid the taxes that were binding but avoided capital gains tax legally by purchasing and selling the flat through an offshore company. Nothing wrong or immoral about that. Tax evasion is completely different from avoidance. This was avoidance which is a legitimate way to save money.

Pak_Patriot | 7 years ago | Reply @H Chaudhry: AK and JKT have declared their OFCs/assets owned by the OFCs in their declarations to ECP/FBR. Nothing's hidden. Their businesses are traceable. Gov must initiate a probe through the FBR or NAB if they feel something doesn't add up. The Sharifs on the other hand did not declare their OFCs/assets owned by OFCs in the 90s when they were setup. That means they hid wealth and evaded tax. Even if they were running a legitimate business and no black money was involved, they broke the law by not declaring assets. They also did not show how the money was transferred abroad. IK, JKT and AK have transaction details to show how money was sent/received. There is no comparison. IK's sister by the way runs a big textile business. Look it up.

Pak_Patriot | 7 years ago | Reply @Imran Qadri: Sorry, but his tax advisers have been filing his returns for over 3 decades. Get your facts straight. He never evaded a single tax. Whether he was making millions or gazillions, it's all taxed at source. He received tax deducted income from endorsements, cricket, sponsorships, etc. https://twitter.com/PTIOfficialLHR/status/731869504364498945

Pak_Patriot | 7 years ago | Reply @Ch. Allah Daad: Are you kidding mate? He never evaded a single tax. Look up tax avoidance, it's 100% legal. As a non-resident in the UK who had 35% tax of his income deducted at source, he had no reason to pay any unnecessary taxes that could be avoided. By buying the flat through an offshore company on the advice of his tax consultant, he avoided capital gains tax which is waived off as per law if you purchase the property indirectly through an offshore company. Otherwise, you have to give a share of the profit (capital gains on property) to the UK gov at the time of selling it. By avoiding this tax, he brought in MORE money to Pak than he would've otherwise. He is not provided all the rights and facilities of a UK resident so he is not morally obliged to pay extra taxes beyond those that cannot be avoided.

janjan | 7 years ago | Reply Apples and Oranges both are rotten

Imran Qadri | 7 years ago | Reply @Sharaf Khan Despite getting tax deducted salary/income, one still has to file his tax returns. Imran has no record of past decades of tax returns when he was making millions both insides and outside the country from sports,advertisement of beverage & other companies and endorsements etc.

Imran Qadri | 7 years ago | Reply Its only Imran's right to use services of Tax accountants to avoid taxes and conceal his income from taxman. If others use such services or use such similar legal options and even though they are running legal businesses according to law of the land they are operating in but still Mr "not so" CLEAN" Khan has issues with them and creates a fuss that why they are using Tax accountants and offshore companies to avoid taxes. Sharifs have seen their business getting hit several times in their business life due to political enmity,victimization,nationalization,fall of Bangladesh etc. So PM's sons had legitimate reason to setup and run business outside the country when unconstitutional military ruler whom Imran was supporting for his own selfish reasons was ruling the country and was after their blood so it was simply not possible for them to run business here.

liaqat ali | 7 years ago | Reply But in 1985 and 1988 , IK didnt mention this property in his candiadcy forms for NA. Why? NS and co. has been avoiding taxes , just like IK. Whats more? Guys get back to the running the country .

H Chaudhry | 7 years ago | Reply @Gaz Your opinion and reality are two different things! Fact is that Sharif family's assets were nationalized in 70s, exiled in 1999, had hugely successful businesses and some failed business like every one else but they have been in business of steel for three generations. In 9 years of Mush nothing was proven. If you think they did corruption your Opinion, prove it in court but that does NOT mean an elected PM will resign period.

Sharaf Khan | 7 years ago | Reply @KhilarI. If you are employed in uk you pay tax at the source ie what you get is after the tax has been deducted. So there was no way he could have avoided paying income tax unless he was contracting on a daily basis. For business again the tax is paid at the end of each tax year.

Khilari | 7 years ago | Reply Dear, he was avoiding taxes in the country he was earning money and he didn't pay tax on this money in Pakistan either?Did this cross your mind?@Jojo:

Ali | 7 years ago | Reply @rehan: yes he paid tax on income 35% but its not only income tax, there is Tax on Capital Gains (Gains on the disposal/sale of flat) i am sure he fell for that firm suggestion that tomorrow when you will not be living here, you wont have to pay anymore tax on selling your property. i think most of us will take such a step to save our hard earned money

Brekhna | 7 years ago | Reply So Imran was cheated by his accountant as well ! How many times did the innocent guy face dhandli in his life.

NKAli | 7 years ago | Reply @H Chaudhry: the question here is that NS and family are holding the highest public office for three decades and should come clean in their performance. What have they done for the country? Since, they were steel magnates in Pakistan their wealth should be in the country's banks and properties. But NO! Their wealth went overseas through cryptic means and loans and taxes remained unpaid. The culture of deceit in Pakistan is that a government officer is above the law and nobody has the right to question him/her. So, 'loot n scoot' is the age-old tradition that has impoverished and fractured the nation. Musharraf broke the nagging bowl and Ishaq Dar has filled it so much that it's brimming over. Can't we live without IMF, WB, ADB and live like honest citizens? We talk of Pakistani patriotism. Tell me in the present scenarios what patriotism exist? Salams A smart move by IK. He came out with the truth and let the citizens know. Whether he still owns it is unknown but by this admission he has put NS in a tight corner. Salams

pervaiz | 7 years ago | Reply Is it right here ?? Thief has been calling loudly.

Humza | 7 years ago | Reply @Gaz: Nawaz Sharif is a businessman and no one has proved that he stole anything from the country. No one should point fingers without proof. We all know that the political landscape of Pakistan would force anyone who is pushed out of power to safeguard whatever wealth he has overseas when a dictator comes in with vengeance like Musharraf. What Imran Khan's excuse to hide his money abroad when he was not part of personal political enmity. Imran just did it to hide money and avoid taxes. The nation has to decide whether off shore tax shelters are legal or illegal and then stop them since currently nothing makes them illegal. The IK is moving to make them illegal now but PM Cameron has yet to show any real steps.

H.A.Khan | 7 years ago | Reply They are all the same;cheats

rehan | 7 years ago | Reply If he already paid the 35% tax on his income, I do not understand what else he had to hide? The money was taxed and he can purchase with that money that is legally declared and paid tax for any thing he wants. He might have to pay property tax which is not that much. In my Opinion he is hiding more there for he needed an offshore account.

MAD | 7 years ago | Reply Would've been nice had this all been disclosed earlier. Both the flat and it's sale are well known. Tax evasion is illegal tax avoidence is not.

Haji Atiya | 7 years ago | Reply It appears the bottom line is that the only person of note which hasn't done anything outright illegal, dodgy, questionable, unethical or dubious from Pakistan is the honorable Mr Edhi. What say we elect him as the next President.

Ch. Allah Daad | 7 years ago | Reply @Lahori: Are you kidding? Only tourists get tax refund. Imran was on a work visa therefore he should have paid taxes. He evaded taxes and has accepted it. We hope British government takes action against him. Stealing tax is a very serious crime in developed countries.

Rex Minor | 7 years ago | Reply I was already paying 35 per cent tax on my income there, so to avoid further taxes, I bought the flat through an offshore firm, which was my right as I was not a British citizen,” he said, adding, “There is no illegality in it.” This act was not illegal but was not legitimate either! He was not a British citzen but nevertheless he was a resident in England and as such was liable for taxes. Rex Minor

rehan | 7 years ago | Reply He should also disclose his sisters off shore companies and all the rest of PTI Members off shore companies. Than declare the source of that much money. Especially his Sister they have no industry, so how did they make that much money.?? I guess the donors of Shaukat Khanum Hospital should find out if all that donation did not go to privat accounts. At the end of the day he is no different then the rest but has the nerves to point at other's.

Gaz | 7 years ago | Reply @H Chaudhry: oh come on Nawaz Sharif the business man, sorry this rubbish will not work any longer, if he such a good business man then why do his businesses go bust when he loses premiership like in 1993 and 1999. It's just a front all his businesses are just shell companies. I bet he has never set foot in a steal mill.

Ch. Allah Daad | 7 years ago | Reply So Imran went to England to fix his own problems. What a liar.

pk007 | 7 years ago | Reply Look who is talking :)

Ashfaq | 7 years ago | Reply It goes to IKs credibility as he himself tweeted that only reason someone sets up an offshore company is when you have some ill gotten wealth to hide. But when it comes to himself his excuse is that he got advice from accountants. That's what everyone's saying but when it comes to NS he applies different standard and the guilty verdict as to the source of wealth has already been passed. Come on guys lets have fair and square accountability across the board and clean up the system.

muhammad | 7 years ago | Reply He himself claims that "Only reason ppl open offshore accts through Panama is to either hide wealth, esp ill-gotten wealth, or to evade tax or both" so there he is! one of those himself.

Parvez | 7 years ago | Reply Although this means little......Imran Khan still has not understood politics......in which perception is far more important than facts. He commits blunder after blunder....small though they may be but a blunder is a blunder.

Shahid Akram | 7 years ago | Reply I still believe Imran is an honest person. But he should believe in democracy.

Jee aye Chaudhry | 7 years ago | Reply IK: "Only reason ppl open offshore accts through Panama is to either hide wealth, esp ill-gotten wealth, or to evade tax or both." So does that also apply to ‘Niazi Services Limited’ of Jersey, Channel Island? If IK did what was legal but was it moral? NS also probably did it legally the morality could be questionable, if money kept abroad was through tax evasion. Nevertheless, where is the proof?

Mirza | 7 years ago | Reply IK is a petty thief and Sharifs are big thieves. There is not much difference as according to IK's own Tweet the only reason to make corporations is ill gotten wealth or not paying taxes or both. Stealing monies directly or taxes are basically theft. If taxes are paid at the required rate fair and square there is no reason to hide behind corporations that cost legal expense too. IK should prove that he paid full taxes to Pakistan/UK and it was extravagant to waste monies in making corporations and registering.

Lahori | 7 years ago | Reply Imran Khan created an offshore account to avoid paying any taxes to the British government. Being a citizen of another country, this is not even an ethical issue. Remember, as a tourist most countries even refund the SALES TAX officially at the airport etc.

Atif Khan | 7 years ago | Reply @ H Chaudhry So who is going to investigate it? FIA, Police, IB, all under the govt, shouldn't it have been the top priority of the govt to nab the likes of Tareen/Aleem and co? It was all good till the time nobody touched Sharifs but has become all bad since Sharifs have been named in panama papers? If govt too is saying this should be done, that should be done, then who on earth is going to actually do it? I mean, what on earth you N league supporters eat?

Adnan Naqvi | 7 years ago | Reply What a shocker, another politician not paying due taxes.

Parvez | 7 years ago | Reply In politics perception is more than reality....Imran Khan still has not learnt.

Rex Minor | 7 years ago | Reply Speaking to reporters at London Heathrow Airport, Imran said he formed the offshore firm on the advice of his accountant to “avoid UK taxes”. That he is a characterless individual and second class crook is known everywhere except in KPK province. It is not illegal to minimise tax liability but why in offshore company account which are used by those who do not wish to reveal the source of the wealth. Rex Minor

Aap ki raay | 7 years ago | Reply Trend setter of offshore company.This Niazi is a tax evader.

H Chaudhry | 7 years ago | Reply @Jojo there is no apples / oranges comparison. Sharif family has been in steel business for three generations, was exiled in 1999. If any one they have legitimate claim as they have been in business. So much so, their assets were nationalized in 70s. Question is where did the money come for people like Tareen/Aleem Khan/Imran's sister to have off shore companies. Tareen/Aleem Khan/PM Nawaz/Imran Khan/Imran Sister should be the first group to be investigated. One family CAN NOT be investigated just to make a loser opposition happy. So start with this group.

Ahsan siddiqui | 7 years ago | Reply Nothing that has not been disclosed .. Not once but gazillion times .. He even quoted the sale price of his flat in Dec 2011 in a press conference he gave the price as well that actually matches now .. Anyone can go on zoopla and put the address it will exactly the same peice IK has quoted in 2011 and the date as well that he has told in 2011 .. Money is in pakistan property in pakistan money travelled through banking channel .. Everything declared .. All the money trail is there .. The biggest super star of pakistan who earned money abroad brought it back to pakistan through legal channel .. .. What is the fuss? And what is new that he has not said before? Its all in public domain for years .. He himself gave that info many a times ..

Hassan Khan | 7 years ago | Reply Noon is trying to derail discourse on PM and his family's corruption by pointing to the assets of chairman PTI. His assets and tax details are very much displayed on our website. Can anyone tell from where do we find the asset n tax details of NS n his family? This is difference and this is the crux of the matter.

Jojo | 7 years ago | Reply So what are we discussing here now, IK bought a flat through offshore company in 1983 when he was no holding any public office or neither was a MNA and paid all the tax in UK as he earned the money by playing coutny cricket, this company since then has been closed and is not named in Panama but those which are named are now screaming loud on it, we want to know from where the money came for companies owned by shaif family which were made when Nawaz shreef was the PM of Pakistan, comparing apples with oranges..

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Imran admits owning offshore company to ‘avoid UK taxes’

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