Emails show Peter Mandelson discussing Panama tax structure with Jeffrey Epstein

Previously unreported emails – first identified by Tax Policy Associates – show Peter Mandelson discussing with his “chief life adviser”, Jeffrey Epstein, a tax avoidance structure for the purchase of a £750,000¹ Rio apartment, involving a Panama company.

Lord Mandelson told us that he has no recollection of the proposal, or knowledge as to the authenticity of the documents. He added that neither he nor his husband have ever owned property in Brazil, and that he has no association with any company in Panama, and holds no funds offshore.

After receiving that response, we identified a company, incorporated in Rio de Janeiro for the purpose of holding real estate, of which Lord Mandelson and his husband were the directors. Lord Mandelson has denied to us that he held Brazilian property through the company.

The emails

The email chain starts in October 2010, with Peter Mandelson deciding to buy an apartment in Rio, and sending emails asking for advice from his “chief life adviser”, Jeffrey Epstein:

The purchase price of 3.35m rials was equivalent to about £750,000.

About three weeks later, the documents show Lord Mandelson receiving approval from HSBC Private Bank for a loan of £1.68m to acquire the Rio apartment, secured on Lord Mandelson’s £2.4m London home. It’s unclear why the loan was for so much more than the property.

Things progressed slowly, which is not unusual in Brazilian property transactions. In March 2011, Lord Mandelson wrote to Mr Epstein describing a highly unusual tax structure:

The email appears to be cut-off at the bottom, and we’ve been unable to locate anything further on this matter in the Epstein files.

“Reinaldo” was Lord Mandelson’s then partner, now husband, Reinaldo Avila da Silva.

What was the proposal?

The proposed structure was:

• Incorporate a Brazilian company (Sociedade Limitada.²
• The owners would be Lord Mandelson and Mr Avila da Silva, plus a newly incorporated Panama company, owned by Lord Mandelson.
• Lord Mandelson would pay for his shares in the Brazilian company with US$50,000, which might also have facilitated a residence permit.
• The Panama company would lend money from its London account to the Brazilian company.

The email doesn’t state how the Panama company obtains its money; presumably it was to be from Lord Mandelson, funded in part from the loan from HSBC Private Bank. There is no evidence HSBC was aware of the Panama structure.

In our view, and that of the Brazilian advisers we spoke to, the arrangement looks like a highly artificial tax avoidance scheme. The effect of the structure was to hide the true nature of the arrangement – a gift from Lord Mandelson to Mr Avila da Silva. The Brazilian advisers believed the Brazilian tax authorities would have challenged the structure, if they had become aware of it.

It’s important to stress that Lord Mandelson has denied that he implemented the structure, and indeed said he cannot recall it.

What was the purpose of the structure?

The stated concern in the email was potential tax exposure in both Brazil and the UK.

There has never been a UK tax on buying foreign property. There is UK tax if a UK resident sells foreign property, or receives foreign rental income, and UK inheritance tax applies to foreign property. But whilst the Panama structure might disguise the income/gains, it likely wouldn’t prevent it being technically taxed in the UK.

Two Brazilian taxes are mentioned. If Lord Mandelson and Mr Avila da Silva bought the property jointly, then this would probably be treated as a gift to Mr Avila da Silva, subject to the 4% Rio de Janeiro state tax on gifts and inheritances (Imposto sobre Transmissão Causa Mortis e Doação).³ The proposed arrangement meant that there was still a gift in substance (as Mr Avila da Silva would own shares in the company holding the apartment) but it was disguised as a commercial loan.

The Brazilian advisers we spoke to couldn’t identify what the 6% tax in the email was referring to. ⁴ It’s possible this was a miscommunication and referring to a different issue.

It is quite possible that Lord Mandelson was misdescribing, oversimplifying, or misunderstanding the precise tax issues he was concerned about. Brazilian tax is notoriously complex, and the email was Lord Mandelson’s own summary of what sounds like a preliminary discussion with a Brazilian adviser. We would therefore caution against reading the tax content too literally.

What matters, however, is not whether the analysis was correct, but what the proposed response was. Lord Mandelson appeared very comfortable with using an artificial Panama structure to avoid tax in Brazil and, possibly, the UK.

Lord Mandelson’s response

We wrote to Lord Mandelson asking for comment:

After this exchange, we identified a company incorporated in Rio de Janeiro in May 2011 for the purpose of purchasing and selling real estate. Its shareholders were Lord Mandelson and Mr Avila da Silva. The company was liquidated in April 2014:

We asked Lord Mandelson. He denied owning Brazilian real estate through the company:

At this point we don’t know what the Brazilian company actually did, and whether it held any property. However the company records are inconsistent with the Panama structure described in the email (because the Brazilian company doesn’t have a Panama company as a shareholder).

There are probably three possibilities.

• The emails are fake, created by an unknown third party, Jeffrey Epstein, or someone in the Epstein investigation. The company is either fake or unrelated.
• The emails are authentic, but the Rio purchase never progressed, and the company was incorporated but never used. It is, however, surprising that Lord Mandelson cannot recall that he came close to spending £750,000 on an apartment in Rio.
• The emails are authentic, the Rio purchase happened, but the Panama structure was not used.

Many thanks to B and P for providing, at very short notice, their Brazilian tax insight and expertise.

Further reading

Tenancy reform: the accidental stamp duty headache for 150,000+ tenants

The Renters’ Rights Act unintentionally turns hundreds of thousands of ordinary residential tenancies into an annual stamp duty reporting obligation, often for tax bills…

Who secretly owns Britain? The hidden offshore owners of £460bn of UK property

Nearly 100,000 properties in England and Wales – worth c£460bn – are owned by offshore companies. We’ve conducted an extensive analysis and created an…

Tax barristers and fraud: how the Bar responded to our allegations

Last week we published a report on how a small number of tax barristers facilitate tax avoidance schemes that are, in our view, more…

Rogue barristers are enabling a billion pound tax fraud – and the Bar won’t act

A small number of KCs and junior barristers are enabling large-scale tax fraud. They do it by providing tax opinions backing schemes designed to…

The Scottish Budget – four thoughts on a tiny tax cut

The Scottish Budget was on 13 January 2026. The flagship policy is being widely reported as a cut in income tax for low earners,…

Gibraltar Corporate Partners: it’s Offshore Advisory Group, rebranded

Back in June we reported on perhaps the strangest firm we’ve come across – “Offshore Advisory Group”. Offshore Advisory Group recently rebranded as Gibraltar…