UKIP leader Nigel Farage has admitted that in retrospect "it was a mistake" to set up a trust fund for his children in an off-shore tax haven.
Speaking to ITV News, he said of the decision to set up the Farage Family Educational Trust 1654 on the Isle of Man:
"The idea was to build something up, my adviser said do this for your family and I did it. In retrospect it was a mistake".
"Firstly, because I'm not really wealthy enough to qualify for this. Secondly, because politically the world's changed and I didn't feel very comfortable with it."
Mr Farage insists he did not personally benefit from the account, and ended up out of pocket.
"I set it up, I closed it down and the whole experience has cost me quite a lot of money", he said.
Mr Farage has previously spoken out against those who evade tax in a speech to the European Parliament.
Labour MP John Spellar said: "I know Nigel Farage wants to appeal to disaffected Tories, but copying some of the Tories' biggest donors by using offshore trusts to avoid tax is taking things too far.
"It's typical of UKIP - they talk about how much they love this country, but they don't even bank here - it's just hypocritical."