A tax adjustment of one and a half billion euros avoided by the Ecclestones?
As the trial of Bernie Ecclestone for corruption has just opened in Munich, the BBC claims that the F1's financial chief allegedly escaped a tax adjustment of nearly one and a half billion euros by settling... only ten million pounds. However, the payment was not made by Bernie, but by Slavica Ecclestone, which makes all the difference.
It was the BBC’s investigative program, Panorama, that revealed this transaction. The timing of this revelation does not help Bernie Ecclestone’s case, as his defense in the Gribkowsky affair is that he only made the infamous $44 million payment to prevent the German banker from attracting the attention of the British tax authorities.
The agreement between the two parties was reached only after nine long years of investigation conducted by Her Majesty’s Revenue and Customs. This investigation was launched in 1999 and concluded only in 2008, with the payment of ten million pounds, which corresponds to six weeks of interest generated by the sums deposited there. The BBC relies on the statements of Frédérique Flournoy, one of the lawyers in charge of the Ecclestone family’s trusts: « In the summer of 2008, the tax authorities offered us to close the investigation if we paid 10 million pounds. We decided to pay. »
The fact that the tax authorities are proposing such a transaction clearly shows that Bernie Ecclestone’s organization was of rare complexity, which is explained by the importance of the sums involved.
It all originated from Bernie Ecclestone’s decision in 1995 to transfer the ownership of Formula 1 shares to his then-wife, Slavica. She then placed these shares in her Liechtenstein trust, which was legal as long as Bernie Ecclestone could prove that he had no control over the management of the trust and was therefore no longer the owner of the F1 shares. This maneuver offered the couple a double benefit: Slavica would not have been obliged to pay the 40% tax in the event of the businessman’s death while allowing Bernie Ecclestone to avoid the 40% income tax if it was proven that he had control over the trust.
But in the transcript of the questioning conducted in the trial initiated by Constantin Medien, it is noted that: « Mr. Ecclestone underwent a tax audit between 1999 and March 2006. The tax audit for his then-wife, Mrs. Ecclestone, even lasted from late 1999 to March 2008. » When Philip Marshall, the lawyer for Constantin Medien, asked him if he acknowledged these facts, Bernie Ecclestone responded affirmatively.
Similarly, when the same lawyer asks the following question: « Which, in fact, I suppose, happened to your wife because she ended up paying a settlement of 10 million pounds. Do you remember? », the answer is unambiguous: « Yes. And she reminded me of it. »
The settlement therefore concerns Slavica Ecclestone and not Bernie Ecclestone. He could thus continue to be threatened by the British tax authorities, as they pointed out in 2011. The Munich trial will therefore also be essential on this matter. Bernie Ecclestone could face up to ten years in prison for corruption while undergoing a significant tax adjustment in Britain…
With the participation of www.Racingbusiness.fr
