Inheritance tax

The Duke of Westminster died on 9 August 2016 with his title passing to his son, Hugh.  The estimated value of land owned by the Grosvenor family is on the region of around £9 billion.  Unfortunately, HM Revenue & Customs will not be rubbing their hands with glee because  the estate of the Sixth Duke of Westminster will not be subject to vast amounts of inheritance tax.  The reason for this is because most of the assets were put into ‘trust’.  It has been reported that the late Duke was a trustee as are other family members of these assets.  However, they ‘managed’ the trust assets for the benefit of beneficiaries meaning that they could buy or sell assets but they could not claim the assets for themselves individually.  The assets therefore remained outside of their estate for inheritance tax purposes.  The Grosvenor family property empire which contains large amounts of the most exclusive postcodes in London, may therefore be held for the benefit of current and future family members in accordance with the terms of the trust.

Will the late Duke of Westminster’s own personal estate be subject to inheritance tax?  An estate upon death has a nil rate band allowance of £325,000.00 for inheritance tax.  If the estate is above this amount, inheritance tax is paid at 40% above this threshold.  The late Duke of Westminster is survived by his wife, Natalia.  If the late Duke of Westminster  gave his personal estate to his wife on his death, she, as the surviving spouse, inherits his assets free of payment of inheritance tax.  If the late Duke of Westminster’s personal assets passed instead to his son or indeed any other children or family members, his estate will be taxed at 40% above the inheritance tax threshold.  It will be interesting to find out how the estate of one of the richest men in the world is to be divided and how much inheritance tax is to be paid.