Queens private estate invested £10m in offshore funds
About £10m of the Queen's private money was invested offshore, leaked documents show.
The Duchy of Lancaster, which provides the Queen with an income, held funds in the Cayman Islands and Bermuda.
A small amount ended up in the company behind BrightHouse, a chain accused of irresponsible lending, and Threshers, which went bust owing £17.5m in UK tax.
The Duchy said the BrightHouse holding now equates to £3,208 and it was not involved in fund investment decisions.
It added it had been unaware the stores featured in the investments.
The chief finance officer of the £500m estate, Chris Adcock, told the BBC: "Our investment strategy is based on advice and recommendation from our investment consultants and appropriate asset allocation...
"The Duchy has only invested in highly regarded private equity funds following a strong recommendation from our investment consultants."
A spokesperson for the Duchy of Lancaster added: "We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate.
"The Queen voluntarily pays tax on any income she receives from the Duchy."
Duchy's reputation
Details about the Duchy's investments came to light in the Paradise Papers - a leak of 13.4m documents from companies including Appleby, one of the world's leading offshore law firms.
The two funds were based in British overseas territories with no corporation tax and at the centre of the offshore financial industry.
But the Duchy said it was not aware there were tax advantages to it from investing in offshore funds, adding that tax strategy was not a part of the estate's investment policy.
The documents show the Duchy of Lancaster put £5m in the Jubilee Absolute Return Fund Limited in Bermuda in 2004, with the investment coming to an end in 2010.
In 2005 the Duchy agreed to put $7.5m (£5.7m) in the Dover Street VI Cayman Fund LP.
Documents show the fund invested in medical and technology companies.
The connection to rent-to-buy firm BrightHouse began in 2007 when the US company running the fund asked the Duchy to contribute $450,000 to five projects, including the purchase of the two UK High Street retailers.
This included an interest in London-based private equity firm Vision Capital, the company which acquired 100% of BrightHouse and 75% of the owners of Threshers off licence chain.
The Duchy said its investment in the Cayman Islands fund is due to continue until 2019 or 2020 and amounts to 0.3% of the total value of the estate, while its interest in BrightHouse now equates to just 0.0006% of its wealth. The Duchy did not provide a figure for its interest in Threshers.
A Vision Capital spokesperson said: "Vision Capital complies with all laws and regulations and pays its tax in full and on time. Any suggestion to the contrary is wrong."
Labour MP Margaret Hodge, the former chair of the Commons Public Accounts Committee, said she was "pretty furious" with the Queen's investment advisers, saying they were bringing her reputation into disrepute.
"It is so obvious that if you're looking after the money of the monarchy, you've got to be actually cleaner than clean and you must never go near the dirty world of money laundering, tax avoidance, tax evasion or actually making money in dubious ways," she said.
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