In an interview with the BBC, Leadsom confirmed that she had taken out a mortgage with the Jersey branch of investment bank Kleinwort Benson.
She defended her actions, saying: “I had a mortgage, for which I shopped around for the cheapest deal. At the time it was being offered by a UK bank who booked it to Jersey.”
She denied that that made her a tax avoider or that it had been done deliberately. She said the bank first booked the mortgage in Jersey and then subsequently booked it in London.
Leadsom, one of the two candidates to replace David Cameron as leader of the Conservatives, has also faced criticism about her previous career in financial services.
Former colleagues have accused Leadsom of embellishing her job history and misrepresenting her experience, which she has strongly denied.
“I have not changed my CV. I have had 25 years in finance. I spent the best part of 10 years in BZW and Barclays and the best part of 10 years in Invesco Perpetual.
“I started life as a trainee broker on the London Metals Exchange working for a big American brokerage firm.”
Leadsom said: “My CV is incredibly varied and it’s all absolutely true… I have been very clear – I am not a funds manager. I was, in BZW and Barclays, managing huge teams of people and large budgets.”