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 :

  • You Belong: Shawn Austin Interview

    Belong: Shawn Austin Interview

    We caught up with Shawn Austin at the SiriusXM Canada offices in Toronto on a busy media day for the Vancouver singer and sat down to talk about his career and... Read more

    The 16 October 2018 by   Phjoshua
    LIFESTYLE, SELF EXPRESSION
  • Mattel Introduces Doctor Who Barbie

    Mattel Introduces Doctor Barbie

    Most of what I’ve seen from Mattel recently has been underwhelming. However, the announcement of their newest doll, the 13th Doctor based on the long running... Read more

    The 16 October 2018 by   Ashley Brooke, Kewpie83
    CULTURE, FAMILY, SELF EXPRESSION
  • UNIBEN Admission List Out – 2018/2019

    UNIBEN Admission List for the 2018/2019 academic session is now out on the school portal. All candidates who applied for admission in the university are hereby... Read more

    The 16 October 2018 by   Naijapary
    SOCIETY, A-CLASSER
  • Doll Shows 101: Etiquette

    Doll Shows 101: Etiquette

    For a doll collector, attending a doll show can be as exciting as stepping through the gates of Walt Disney World. Even the most narrowed minded collector is... Read more

    The 16 October 2018 by   Ashley Brooke, Kewpie83
    CULTURE, FAMILY, SELF EXPRESSION
  • Neanderthal Cave Art is Fake News?

    Life in a Neanderthal cave was surprisingly human. They built structures, created jewellery, and cared for each other. To top it all of, we recently learnt... Read more

    The 16 October 2018 by   Reprieve
    BIOLOGY, SCIENCE
  • Is the Tide Turning in Australian Dietary Advice?

    Tide Turning Australian Dietary Advice?

    Has the Dietitians Association of Australia (DAA) had a change of heart? Just last month, we reported that the DAA was heavily influenced by sponsorships ... Read more

    The 16 October 2018 by   Dietdoctor
    DIET & WEIGHT, HEALTH, HEALTHY LIVING, MEDICINE
  • Yahoo Boy On The Run After Chopping off Old Man’s Head and Manhood in Benin...

    Yahoo After Chopping Man’s Head Manhood Benin (Graphic Photos)

    A Yahoo Boy identified as Bino has disappeared into the thin air after beheading a man for ritual purpose in Ayogwiri community Benin . Read more

    The 16 October 2018 by   Naijapary
    SOCIETY, A-CLASSER

Magazine