No inheritance tax has been paid on the bulk of the Duke of Westminster’s £8.3 billion family fortune after his death last year, it was revealed yesterday (Will Humphries writes).
Probate records disclose that Gerald Cavendish Grosvenor, who died aged 64 in August 2016, left a personal estate of £616,418,184 after payment of debts and liabilities. The rest of his wealth was in family trusts which are believed to have been largely passed on to his only son Hugh, 26, without incurring inheritance tax. His son also inherited his title, becoming the seventh Duke of Westminster.
The sixth duke was a close friend of the Royal family and was said to have been worth £9.5 billion by the Sunday Times Rich List. Most of his personal estate was left in trust, with the income going to his widow Natalia, 58, but his trustees were also given the power to transfer all or any of the capital to her.
The UK’s inheritance tax of 40 per cent of any assets worth more than £325,000 is not payable on anything in an estate that is left to a spouse or charity.
John Christensen, director of the Tax Justice Network, the advocacy group, called for an overhaul of the inheritance tax rules. “The big issue here is the way very, very wealthy families have for generations used trusts to pass assets on outside the sphere of inheritance tax,” he said. “It is a glaring loophole. It’s a political choice to have it and it means dynastic wealth is passed down the generations intact, leading to a much greater concentration of wealth.”
A spokesman for the Grosvenor Estate said the trust paid inheritance tax of six per cent on the wealth of the trust every 10 years to HMRC. He said: “The actual amount paid to HMRC over the life of the trust is pretty much equivalent to a single payment on the death of the beneficiary of the trust. The business assets of the Grosvenor Estate are held in trusts to maintain continuity of ownership between generations and not to avoid inheritance tax.”
Avoidance ain’t what it used to be …
Tax avoidance used to be big business for the wealthy and famous but increasingly HM Revenue & Customs are closing the loopholes.
More than 100 BBC stars, sports celebrities and others regularly used what they believed to be legitimate ways to avoid tax through investment schemes and by listing themselves as self-employed. However, the taxman won a ruling in August last year that one such scheme backing investment in films and that qualified for tax breaks was illegal. A corporate criminal offence came into force last month (september) under the Criminal Finances Act 2017 of failing to prevent the facilitating of illegal tax evasion.