Edelson said that his companies had been launched for investment reasons, not for tax planning. He said that charities benefited from the scheme and it was perfectly legal. He strongly denies that any share prices have been manipulated.

“The process is absolutely acceptable. If the charities make less than the investors from the gift, that is a mistake in the way the exchequer has set up the system. There are firms which increase in value and the charity benefits enormously,” Edelson said.

Other firms and advisers have explicitly marketed similar schemes as “guaranteed” tax dodges. They invest the money on someone’s behalf, then move it to charity and take a slice of the profits.

Even if no law has been broken, many tax advisers believe that the practice is “unsavoury”. The big accountancy firms were recently hauled before the head of HMRC and gave assurances that they would not recommend the schemes to their clients. Several wealthy investors are understood to have come to private agreements with HMRC to repay some of the tax relief.

Mike Warburton of Grant Thornton, the accountants, said: “HMRC regards it as an abuse of the charity reliefs and they place it up there with offshore avoidance as one of the main targets in their crackdown.”

Additional reporting: Gareth Walsh

How the share scheme works

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