With Glastonbury Festival well underway, there are reports of founder Sir Michael Eavis’s plans to pass on the multi-million pound event and the wealth it has personally generated to his daughter and avoid a sizeable inheritance tax bill.
With ‘wildly speculative’ valuations of Glastonbury flying around the reality is changes to Inheritance Tax (IHT) mean both the company, and the land at Worthy Farm, are liable on Sir Michael Eavis’ death. And the plans put in place by the family are to be celebrated said one law firm.
In October Eavis gave the shareholding in Glastonbury Festival Events Ltd, the company which operates Glastonbury Festival, to his daughter Emily; shares which would not be subject to IHT should Sir Michael Eavis, who is 89, live another seven years under the potentially exempt transfers rule. Three quarters of the shares in the separate holding company, Glastonbury Festivals Limited, were transferred into a trust.
It has been suggested that both measures could potentially save as much as £80m in IHT based on the valuations of the festival.
The 1,500 acre Worthy Farm also faces a large IHT bill on Sir Michael Eavis’ death as a result of the changes brought in by Chancellor Rachel Reeves.
Responding to press reports Glastonbury said:
“With his 90th birthday approaching, Michael Eavis has proceeded with his long-held plan to pass control of the festival over to his daughter, Emily. The past few years have already seen Emily take over the day-to-day organisation of the event, and this latest change was simply another part of that process.”
Commenting on the reports Gavin Birchall, Partner and Head of Tax and Trusts at Birketts LLP said
“Passing a family business down to the next generation and utilising tax reliefs whilst they are still available should not be viewed negatively. There are important reasons why those reliefs exist, not least to encourage economic growth and dynamic family businesses where reward can be more closely aligned to the generation running the business. We should take pride in the success of our nation’s family businesses rather than cast negativity over the fact that existing tax reliefs are being utilised as originally intended by Parliament.
In the last couple of weeks farmers and business owners have instructed a law firm to serve proceeding on the Chancellor of the Exchequer and HMRC for a Judicial Review of the government’s decision not to consult on the planned Agricultural Property Relief (APR) and Business Property Relief (BPR) changes. Spokesperson for Collyer Bristow, who were instructed, James Austen, said the claimants do not seek to overturn the changes, but contend proper process was not followed and a ‘proper consultation’ should be undertaken in line with the government’s obligations.
