David Cameron divulges to me his past interest in the Panamanian trust, Blairmore, set up by his father Ian - which he sold shortly before becoming Prime Minister in 2010 - and details of his £300,000 inheritance. The full interview, in which he says criticism of his father is unfair, is below.
Robert Peston: Have the disclosures about Blairmore, the company set up by your father in the Bahamas and Panama, been embarrassing to you?
David Cameron: It has been a difficult few days, reading criticisms of my father and his business practices - my dad a man I love and admire and miss every day.
I think a lot of the criticisms are based on a fundamental misconception, which is that Blairmore, a unit trust, was set up with the idea of avoiding tax. It wasn't. It was set up after exchange controls went so that people who wanted to invest in dollar denominated companies could do so.
And there are thousands of other unit trusts set up in this way. It was reported to the HMRC, the Inland Revenue, it reported itself every year. It was properly audited.
It wasn't a family trust. It wasn't for the benefit of one particular family. Anyone could have bought units in it. And crucially if you were a UK citizen and bought units in it then you paid income tax on the dividends and you paid capital gains tax when you sold the shares. It was subject to full UK taxation. So that's what it was, there are many other unit trusts like it. And I think it is being unfairly described and my father's name unfairly written about.
RP: The effect of Blairmore's structure meant it didn't pay tax. Is that wrong?
DC: The point is that it was a unit trust. So the money it had was other people's money on which they pay tax. If you were a United Kingdom owner of these things you paid income tax on your dividends and you paid tax in the normal way. If you were a foreigner you would pay tax in your own country. There are thousands of unit trusts and there are millions of people who own shares in Britain, many of whom hold them through unit trusts. And as I said Blairmore was licensed by the Inland Revenue and reported to it every year.
I have been very clear about the future. I have said I am not going to benefit from any family trusts. I have been very clear about the present, I don't own any shares, I don't own any unit trusts or any investments like that. I own two homes - one of which I rent out - and I have a salary as prime minister. So my affairs are very transparent. I am happy to make them more transparent.
But I should deal with the past as well. Because of course I did own stocks and shares in the past - quite naturally because my father was a stockbroker. I sold them all in 2010, because if I was going to become prime minister I didn't want anyone to say you have other agendas, vested interests. Samantha and I have a joint account. We owned 5000 units in Blairmore Investment Trust, which we sold in January 2010. That was worth something like £30,000.
RP: Was there a profit on it?
DC: I paid income tax on the dividends. There was a profit on it but it was less than the capital gains tax allowance so I didn't pay capital gains tax. But it was subject to all the UK taxes in all the normal way. So I want to be as clear as I can about the past, present and future. Because frankly I don't have anything to hide. I am proud of my dad and what he did, the business he established and all the rest of it. I can't bear to see his name being dragged through the mud. For my own, I chose to take a different path from my father, grandfather and great grandfather, who were all stockbrokers, and I have nothing to hide in my arrangements.
RP: So I am sorry to press you on this but part of your dad's estate was in Jersey when he died. Did you benefit from that?
DC: He left me some money, very generously, quite a lot of money. It was £300,000. I obviously can't point to every source of every bit of the money, and dad isn't around to ask the questions now.
He was a very hardworking man who built up a business. He left his house to my brother. He left me some money. And left things to my brothers and sisters too. And I think there is transparency about all of that. And in the future I am not benefiting from any Cameron family trusts. At the moment I own no shares, no investments. I have savings.
If people want information about my tax return, I can tell you what goes on mine. And I said before the last election, if we want to move to a situation where prime ministers and potential prime ministers publish this information, I am very happy to do that. So I hope I have dealt with the future, present and the past. I've frankly been more transparent about these things than any prime minister in the past.
RP: So you can't be certain some of that £300,000 didn't come from offshore sources?
DC: Well he had investments in Blairmore.
RP: And in Jersey?
DC: Well that was because of another unit trust, again established to UK standards, and many people have those investments. But in all of this I've never hidden the fact that I am a very lucky person. I had wealthy parents who gave me a great upbringing. Who paid for me to go to an amazing school. I have never tried to be anything I am not. And I am lucky, in that I earn a good salary as prime minister, my wife is successful and earns money and we own two very nice houses. So I am not pretending anything. But I was keen in 2010 to sell everything, shares, all the rest of it, so I can be very transparent. I don't own any part of any company, any investment trust, anything like that.
RP: There was a time when you talked about being completely transparent, publishing everything on an annual basis, in terms of assets and income and all the rest of it. Are you going to revisit that? Should senior politicians be completely transparent with their earnings and assets?
DC: I think the idea of publishing the information that goes in your tax return, I am very relaxed about that. It didn't happen before the last election. It did not come about.
I don't think this should be for every MP. It is a very big change in our system. It should be for the prime minister, and the potential prime minister. I am very happy for that to happen.
RP: Of course it won't be you publishing, you are standing down?
DC: That is why I am very happy to get on and do that now. Whether we get on and do it every year, or starting now, or going back a couple of years, I am very happy with that.
And that will be a big change. So we shouldn't dive into it and insist everyone does it. But if people want the prime minister and potential prime minister, as I said before I am relaxed about that, I am happy to do that.
RP: People often say to me that paying the tax that you owe is a moral issue. Is it a moral issue?
DC: Yes. Absolutely. We should pay the taxes that we owe. And also I have said very clearly that there is not only the rules, and the rules on these things are changing, on investments and all the rest of it, some of the changes brought in by my government, we've done more than any previous government to crack down on aggressive tax avoidance, on abuses. I think we have raised an extra £12bn by doing that. But there are the rules and also being content with the choices you make. And I think both are important. And frankly the rules on this sort of area have changed, the culture is changing too, and that is a good thing.
RP: Do you feel any personal conflict of interest? The way your father behaved was typical of stockbrokers of his generation. But standards have changed.
DC: Well rules have changed, culture has changed. And I welcome that. But if you look at today, what a leading tax adviser Graham Aaranson has said, he has been been very clear that unit trusts like Blairmore were set up and it would be completely wrong to say they were set up as vehicles for tax avoidance. When they were set up the world had changed, exchange controls had come off, it was now possible to set up organisations where people wanted to buy dollar-denominated companies and shares and stocks right around the world. And they could do that. And these unit trusts, of which there are still thousands in our country, were properly audited and looked at by Revenue and Customs, and that is as it should be. But if you are asking do rules need to change more, do customs and practices need to change more, absolutely? This government has been right behind that.
We are getting country after country to share tax information so that people can't hide their tax details. We are the first country in the world to have a register of beneficial ownership so everyone can see who owns what company. We are taking huge amounts of action and will announce more in our anti-corruption summit in May, to make sure London in particular does not become a home for hot money. So we are committed to taking all of these steps.