One single aristocrat just avoided more in inheritance tax than the entire NHS deficit

Support us and go ad-free

It has been revealed that the new Duke of Westminster, 25-year-old Hugh Richard Louis Grosvenor, will avoid paying inheritance tax on his late father’s £9bn fortune. Had he been taxed at the usual 40% rate, he would have paid up to £3.6bn in tax – substantially more than the entire NHS deficit of £2.45bn.

Since his father’s sudden death, Grosvenor (the youngest godparent to Prince George) will now become the third wealthiest landowner in Britain and the 68th wealthiest person in the world. He will also own numerous estates in addition to his residence, Eaton Hall in Cheshire. These include large areas in the wealthy London Boroughs of Belgravia and Mayfair.

Most UK citizens are contracted by law to pay an inheritance tax after they inherit. This can be up to 40%. But Grosvenor is able to avoid a significant cut to his £9bn inheritance due to the fact that the estates are held in a trust.

This loophole means that Grosvenor gets out of paying up to £3.6bn in tax. Shockingly, this is only £1bn short of the total inheritance tax collected in the UK last year.

By having an estate in a trust, Grosvenor is the legal owner but not the beneficial official owner of the estate. Therefore, the assets are at arm’s length and exempt from death duties.

As Hugi Clarke of estate planning firm Foresight reveals:

[the legal owner does] not have entitlements to either the income or the assets themselves.

Read on...

Support us and go ad-free

But as legal owners, the trustees can do anything an ordinary owner can do in terms of selling and trading the assets within the trust. Furthermore, income and other benefits can be paid out to beneficiaries, who may or may not include the trustees.

An individual trustee cannot claim the income for themselves. But any assets can be put into the trust to build their wealth for the family and for future generations.

Ian Dyall, a manager at the financial adviser Towry stated that in a trust like Grosvenor’s:

money can stay in the trust and cascade down from generation to generation and nobody pays inheritance tax on it.

Loopholes such as this one have been used by the elite, including David Cameron, the Queen Mother and Tony Benn. Fundamentally, it allows the rich to get richer and build wealth within their family.

These loopholes are of course open to everyone. But people need to have a large estate or wealth to make such structures feasible. Without existing wealth, there would be no way to use most of these loopholes.

It’s another reminder that the Conservatives’ mantra is so ludicrous. Wealth doesn’t trickle down at all. It merely stays at the top, collecting into huge and preposterous mounds.

Get Involved!

– Sign the petition to stop tax dodgers!

– Have your say about this issue on The Canary’s Facebook page

Featured image via Flickr/Henry Lawford

Support us and go ad-free

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us

Comments are closed