Duke of Westminster Avoids Huge Inheritance Tax Bill Using Legal Loophole
Hugh Grosvenor was the 68th richest person in the world when his father died in 2016 and he inherited his £9billion fortune. The Duke of Westminster, who today got married with Prince William as his best man, avoided a billion pound tax bill, thanks to a legal loophole.
The Duke of Westminster with is new wife Olivia (Image: Getty Images) ByKelly-Ann Mills News Reporter 15:52, 7 Jun 2024 Updated08:53, 8 Jun 2024
Hugh Richard Louis Grosvenor became the 7th Duke of Westminster after the sudden death of his 64-year-old father in 2016. He also became the third wealthiest landowner in Britain and 68th wealthiest person in the world at the time, according to Forbes.
But the then 25-year-old Duke was able to keep all of his father’s estate worth an estimated £9billion, thanks to an inheritance tax rule which meant he didn’t have to hand over a huge wad to the government’s coffers.
The new Duke was due to pay 40% inheritance tax to the Treasury and would have almost equivalent to the government’s entire death duty income for the financial year. But as the estate was held in a trust, the tax does not apply. Trusts are subject to charges every 10 years from the anniversary of their creation and are due to be 6% of the amount in trust. But there are many other loopholes such as agricultural and business property relief which accountants for the Grosvenors will take full advantage of.
Ian Dyall, a manager at the financial adviser Towry, told the Guardian: “The benefits of trusts are that they don’t form part of somebody’s estate. In a discretionary trust, you have a whole pick list of potential beneficiaries which the trustees can choose to appoint benefits to.
Great , if he can do it so can others.
Was he protected by a non-registered trust?
Even registered trusts protect the estate that is under it, it’s just that non registered trusts are in the private and so there are no loop holes to jump through, it is not subject to tax (unless you declare it has ‘income’ or ’employees’ etc and then you invite the tax man in). Unregistered trusts don’t have ‘income’ or any other of the public words that would essentially mean giving jurisdiction to the public realm.