The latest exposé by The International Consortium of Investigative Journalists has rightly received huge media coverage. The combination of political figures and offshore tax havens is a heady mix indeed. If you are a cynic, the news that 'democratically-elected politicians' have used bearer share companies (sometimes held within civil law foundations) to hold assets should not be a surprise.

If these leaks ultimately prove some politicians are corrupt that is a good thing - but jumping to early conclusions is foolhardy. What the leaked information does not prove is any malfeasance. The inference is, however, that many politicians and public figures in positions of power and influence have used offshore companies and/or trusts and foundations to hide assets from public view and in some cases avoid tax. The ATO in Australia and HMRC in the UK have announced they will use the leaked information to determine whether those implicated have indeed evaded tax by analysing tax returns and then commencing enquiries.

There are instances where confidentiality is the primary driver to the establishment of an offshore structure, whether it be in the form of a company or trust/foundation or combination of the two. However, the creation and ownership of any such arrangement will invariably have a tax consequence at the outset and throughout its existence.

Most developed jurisdictions around the world have complex anti-avoidance rules that seek to prevent individuals from sheltering income and gains through the use of offshore structures. These anti-avoidance rules work by attributing the income and gains of the offshore company or trust to the person who has initiated the creation of the structure, often referred to as the ultimate beneficial owner or UBO.

However, not all countries have implemented such complex anti-avoidance rules meaning that individuals in places like Russia, Ukraine, China, etc., have been able to create offshore structures without falling foul of any domestic tax rules. Most countries do publish so-called blacklists of those countries considered to be tax havens. Panama regularly features on these lists, but interestingly was removed from the Ukraine blacklist some years ago for no obvious reason. News that Ukrainian figureheads have used Panamanian structures perhaps explains why this is the case.

The Panamanian law firm Mossack Fonseca and its associated trust company, Mossfon, has found itself at the centre of the storm. Mossack Fonseca, is, together with a handful of other players, one of the largest incorporators of offshore companies in the Caribbean. In many instances it will simply have acted as incorporation agent, acting for a third party (invariably a trust company's law firm) that has the primary relationship with the ultimate beneficial owner. In those cases, Mossfon, are simply incorporating the company and providing domiciliation services (registered office address). Directors will often be provided by the third party and Mossfon's role will be limited, with them relying on the client's other advisers to provide guidance.

The claim that the offshore world is murky is a difficult one to defend in the current climate, but balanced reporting is necessary to avoid knee-jerk reactions. After all, huge steps have been taken since the Edwards Report in 1998 to regulate the supply and administration of offshore services. From the Financial Action Task Force's 40 Recommendations to the most recent OECD initiative, the Common Reporting Standard, the offshore industry has never been better regulated. The result of this regulation is the free flow of information between tax authorities, itself an erosion of privacy. Not so long ago the bilateral exchange of information was unheard of other than in the most exceptional of cases. Not so now - how the world's authorities will cope with the deluge of information coming their way remains to be seen.

The other claim that is often made, is that the offshore world is somehow only for the elite and super rich. This is simply not the case. A quick search on the internet will allow you to identify a host of trust companies in all corners of the world that will incorporate and manage an offshore company for $2,000!

There is absolutely no place for tax evasion in our society. There is, however, every place for privacy. The legitimate use of corporate entities for holding passive investment assets or undertaking a trade or one-off transaction, whether for tax planning purposes or maintaining confidentiality, is a right that must be upheld.

Miles Dean is the founder of Milestone Tax