• March 28, 2024
 Tax relief for a £9 billion estate

Tax relief for a £9 billion estate

Following the death of one of the richest men in the UK, the heirs to the £8.3 billion Grosvenor estate could potentially be left with a £3 billion inheritance tax (IHT) bill, it has been reported.

The vast majority of the late Duke of Westminster’s estate is made up of land. With such an inheritance, it’s often considered whether or not selling or keeping is the best answer to reduce IHT burdens. Experts say there are however a number of strategies to maintain similar large estates, while also reducing tax payments.

Death in Service

5th Duke of Westminster: the estate was deemed tax exempt as cause of death (cancer) was said to be accelerated by his Second World War injuries.

Discretionary Trusts

Dukes of Marlborough: trustees of the estate, as well as inheriting the trusts, also have power to decide who can reside within the Blenheim Palace. Within this strategy, assets do not make up an entire estate and individuals have no absolute rights to the assets, therefore no IHT liability on death is applied. Tax charges only apply once the assets within the trust are distributed as well as every 10 years with a maximum of 6% of the chargeable assets.

Agricultural Relief

Potential for the 6th Duke of Westminster: must be pastoral or agricultural land with the possibility of property attached to land also being included. This can provide up to 100% tax relief.

Heritage Relief

Canarvon family (Highclere) & Percy family (Alnwick Castle): applied to property of outstanding national historical or architectural interest that are then opened to the public. Costs are applied through any restoration and preservation work that is to be undertaken.

Business Property Relief

Potential for the 6th Duke of Westminster: can be used when assets are held within a business as part of the estate. Depending on how the assets are structured and bequeathed, up to 100% tax relief can be obtained.

Heather Cameron