Duke of Westminster 9bn Inheritance Trust Disquiet

Duke of Westminster £9bn Inheritance Trust Disquiet.

Many are calling for a change to trust laws and taxation following the passing of the Duke of Westminster and the reported wealth of £9bn held inside discretionary trusts meaning that no 40% inheritance tax bill is payable.

What is a Discretionary Trust?

• Read about Discretionary Trusts

Comment

We disagree with calls to change the law.  Discretionary trusts are taxable immediately when total money gifted in the last 7 years including gifts to the trust exceeds the inheritance tax nil rate of £325,000.  These are known as Chargeable Lifetime Transfers and taxed immediately at 20%.  In addition, a periodic charge of 6% of the value of the trust is payable every 10 years.  Therefore, over the maximum lifetime of a discretionary trust of 125 years, that could be 11 payments of  6% of the trust value.  This is much more than 40%.

Interestingly, no calls are being made by politicians to remove the fact that gifts to political parties are immediately free of inheritance tax.