Obviously most posters understand exactly how these funds work judging by the criticism of them being made.

Could someone explain exactly what is wrong with them and for example how the shareholders of Blairmore Holdings gained any tax advantage by the company being based overseas.  Everything I've read seems to indicate that when dividends were paid to UK residents or shares were bought or sold then all UK taxes were paid by those individuals - in exactly the same way as if shares were bought on the New York Stock Exchange. 

So how do the owners of these companies actually gain any tax benefits?