Debate Magazine

"Inheritance Tax: Why the New Duke of Westminster Will Not Pay Billions"

Posted on the 17 August 2016 by Markwadsworth @Mark_Wadsworth

The Guardian kicks off in usual whiney fashion:
Had the Grosvenor estate bequeathed to the new Duke of Westminster been liable for 40% inheritance tax, the amount owed to the Treasury would have been not far off the government’s entire death duty take for the last financial year.
Hugh Grosvenor, however, avoids a significant cut to his £9bn inheritance because the estate is held in a trust. Britain’s generous trust law ensures that the country’s largest fortunes are largely kept intact. This is borne out by statistics which show that duties are a modest source of revenue for the Treasury. HMRC collected total tax of £534bn in 2015-16, of which inheritance tax receipts represented £4.7bn.
“The benefits of trusts are that they don’t form part of somebody’s estate,” says Ian Dyall, a manager at the financial adviser Towry. “In a discretionary trust, you have a whole pick list of potential beneficiaries which the trustees can choose to appoint benefits to. Because of that, you can’t point a finger to any potential beneficiary and say that’s your money. Money can stay in the trust and cascade down from generation to generation and nobody pays inheritance tax on it.”

But is fair-minded enough to explain the catch:
Instead of one-off taxation, trusts are subject to charges every 10 years from the anniversary of their creation. Known as the inheritance tax periodic charge, it can amount to 6% of the funds held. There are, however, plenty of loopholes. Agricultural and business property relief applies, and the Grosvenor assets will have been managed to take full advantage of that.
For sure there are loopholes, so why not do a 0.6% annual charge on the value of a home with exceeds the IHT nil rate band and simply add it to the Council Tax bill? They can do the same for the ATED charge aka Mansion Tax Lite, only instead of charging a high rate on a small number of dwellings which are currently caught, they could apply a much smaller annual charge to all dwellings in the value bands to end up with the same revenues. The same goes for SDLT, an awful tax, that can be turned from a large one-off charge every time a home is sold into a much lower annual charge. Then the next obvious step is to revalue all homes, make an adjustment for bricks and mortar value and smooth out the resulting tax bill relative to values to avoid cliff-edges and we end up with low-level LVT, job done.
As a result of all this we can simply scrap Inheritance Tax because the residual revenues on everything that is not land-related would be peanuts and probably shouldn't be taxed anyway.

You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • 220. Iranian Director Mohammad Rasoulof’s “Lerd” (A Man of Integrity) (2017),...

    220. Iranian Director Mohammad Rasoulof’s “Lerd” Integrity) (2017), Based Original Story/script: Very Critical Philosophical Look Corruption Religious Intolerance Iran Today

    "Early on, this film introduces us to many different facets of its main character's life that barely seem to relate. Gradually and powerfully, the script... Read more

    10 hours, 34 minutes ago by   Jugu Abraham
  • Bev/Kat of Cylbourne Park

    Bev/Kat Cylbourne Park

    Been off the frequency for some time. …Obviously.  …Almost never even look at FB anymore. Mostly only to post a new obsession. A lot is happening. Private life,... Read more

    10 hours, 39 minutes ago by   Shewritesalittle
  • Pra Pra Prank, Gurgaon: It Takes Two To Tango….delightfully!

    Prank, Gurgaon: Takes Tango….delightfully!

    One would think that it would be difficult to recreate magic after Prankster but the same team headed by the Banga brothers have done it again! Read more

    11 hours, 28 minutes ago by   Indian Food Freak
  • Hot Cross Bacon Baps

    Cross Bacon Baps

    One of the things I love most about the Easter Season of eating is . . . Hot Cross Buns! Although they are generally available all year round now it seems, WE,... Read more

    12 hours, 20 minutes ago by   Mariealicerayner
  • Faustina Pace

    Faustina Pace

    After people ask me if I have been to antique row in West Palm Beach, the next logical question is,"what was your favorite store?" My answer is Faustina Pace... Read more

    14 hours, 46 minutes ago by   Cleskowitz
  • Sedo Weekly Sales Led by

    Sedo released their weekly sales and led the way at $500,000. was number two at $140,000. 43 .com sales 16 cctld sales 5 other gtld sales... Read more

    The 20 March 2018 by   Worldwide
  • 9 Types Of Men’s Bags

    Types Men’s Bags

    Here are 9 popular men’s bags that are both functional and fashionable. Here is a range to compliment both business and weekend attire. What is a man’s bag? Read more

    The 20 March 2018 by   Von Baer Uk