An MP has dismissed as "malicious" claims he structured his financial affairs to reduce his tax bill.

Much of Philip Hammond’s estimated £7m wealth comes from his company Castlemead, which builds luxury homes and care homes.

Channel 4 programme Dispatches reported on Mr Hammond’s finances, and those of other Conservative cabinet ministers, on Monday, October 18.

The MP received dividends from Castlemead rather than a salary, including a £1.75m sum in 2007.

National insurance contributions are not paid on dividends, unlike wages and salaries.

However, Mr Hammond and the programme makers agreed the saving was marginal when corporation tax was taken into account, and the difference amounted to about 1 per cent.

The MP for Runnymede and Weybridge said: “All my relevant financial interests have always been fully declared and publicly available on the Register of Members’ Interests.

“At all times I have paid all taxes for which I have been liable and any suggestion that in reaching these arrangements my motivation was to avoid tax is without foundation.”

The programme also said the MP, who became Secretary of State for Transport in May, transferred 40 per cent of his shares in the company to his wife last October.

Mr Hammond confirmed tax on the dividends would be lower if his wife was in a lower tax band than him, but declined to discuss whether this was the case.

He said: “Last year, in anticipation of entering Government, I made preparations to dispose of my shareholdings in Castlemead.

“This included transferring 40 per cent of my shares to my wife.

“I have subsequently put the other 60 per cent in a trust.

“This was done on advice and was cleared by both the Permanent Secretary and the Cabinet Secretary following proper procedure.”

He said the move was designed to comply with the Ministerial Code, which states ministers must “scrupulously avoid” any conflict between their government position and private financial interests.

He added no dividends had been paid on the shares since they were transferred.