Prime Minister faces IHT furore over land he bought for parent’s donkey sanctuary

Prime Minister Sir Keir Starmer has tackled allegations of tax avoidance after it emerged he had benefitted from a significant increase in the value of land acquired behind his parents house he had acquired and placed in trust to enable them to keep donkeys. 

The land located behind his parent’s house was acquired in 1996 for £20,000 and placed in a trust for the purposes of giving his parents access to it for use as a donkey sanctuary. Starmer has pointed out he never transferred the title, rather the trust enabled his parents to have access to the land. On his parent’s death, his mother’s in 2016 and father in 2018, the trust dissolved and the land was reverted back to Starmer.

The furore has erupted because by placing the land in trust, he avoided its inclusion in estate calculations and benefited from the substantial increase in value; the land was sold alongside a small adjacent strip belonging to his father for £320,000 in 2022,  valuing the field at around £295,000. The nature of the trust meant the land belonged to Starmer personally and no valuation of the land was required for inheritance tax calculations.

The issue is a sensitive topic for the Labour party. When running for leadership Starmer made clear tax avoidance, even legal avoidance, needed to be ‘clamped down on’; ‘I think it’s pretty simple: those in charge of taxation can’t also be seeking to avoid it’ he said at the time. The party has recently lost its deputy prime minister after allegations of tax avoidance when Angela Rayner purchased a flat and did not pay enough stamp duty.

A Downing Street spokesman said:

“Keir Starmer bought a field for his parents to use for their donkeys during his parents’ lifetime. He did not give any thought at the time to any tax considerations. His only consideration was the wellbeing of his parents. Keir Starmer engaged a leading tax KC to give him comprehensive advice on all the taxes paid. He confirmed that there had been absolutely no underpayment of taxes.”

Interviewed by the BBC on the Sunday with Laura Kuennsberg programme Sir Kier Starmer said he had not created a trust:

“I didn’t create a trust, I simply bought a field and said to mum and dad, ‘This is for you’. I bought a field for £20,000 at the back of their house and said, ‘Here’s your field, it’s yours for as long as you may live, you can put your donkeys in it’.”