Ukip leader Nigel Farage has admitted he made "a mistake" by setting up a trust fund in an off-shore tax haven.
Mr Farage, who has previously spoken out against those who evade tax in a speech to the European Parliament, admitted that he paid a tax adviser to set up the Farage Family Educational Trust 1654 on the Isle of Man, the Daily Mirror said.
The newspaper said Mr Farage insisted he had not personally benefited from the account, and that he claimed he had ended up out of pocket.
The MEP told the Mirror: “My financial advisers recommended I did it, to have a trust really for inheritance purposes and I took the advice and I set it up. “It was a mistake. I was a completely unsuitable person for it. I am not blaming them, it was my fault.”
“It’s a vehicle that you chuck things in through your life that you don’t need and you build up a trust fund for your children or grandchildren. “It was called an educational trust and could have been used for grandchildren’s schools fees, things like that.
“It was a mistake for three reasons. Firstly, I’m not rich enough to need one and I am never going to be. Secondly, frankly, the world has changed. Things that we thought were absolutely fair practice 10 years, 20 years ago, 30 years ago aren’t any more. Thirdly, it was a mistake because it cost me money. I sent a cheque off to set it up.”
The newspaper said Mr Farage transferred his shareholding in a company, Farage Limited, to the Farage Family Educational Trust, based in Douglas, the capital of the Isle of Man. This meant the trust owned 33 per cent of Farage Limited, later rising to 50 per cent, the Mirror said.
Mr Farage denied receiving dividends from the company, and the firm's accountant said that all £969,000 in dividends were paid to the Ukip leader's brother, Andrew. Companies House documents reveal the offshore trust remained a shareholder of Farage Limited until 2011, the Mirror said.
Mr Farage insisted he shut it down in 2007 or 2008, saying: “I sent a cheque off to set it up, out of my own taxed income, and basically just through administration fees that money disappeared.”