Is it too early to chat about billionaires hoarding land and avoiding paying inheritance tax?

[feellikeahugefailure]

I know it involves a death and that's very sad for the family, but irrespective of that I do think inherited unearned assets is huge reason for inequality. The UK ranks badly for equality.

davos the poster was me. I agree with you that IHT should be higher. I was just trying to illustrate how those who stand to gain from inheritance are generally those who have gained already in other ways. So I don't understand why people think it is unfair to have IHT.

Don't most aristocrats put their money in trust funds so they can avoid a lot of inheritance tax? Some do it so that their tenants don't lose their homes and livelihood.

I have rented from such an estate: we rented a house at going rate, as did 10 - 15 other 'move ins' and 4 or 5 tenant farmers rented at an affordable rent. The whole estate was held in trust. The previous generation didn't do it and had to sell off some houses to pay the IHT and 2 farms had to be sacrificed! That's 3 or 4 generations of work down the pan, families now split up and a very rural area now threatened as it is no longer financially viable.

You may think, so fucking what? But in many places farmers and rural life is intricately linked to said 'aristocrats' who do their damnedest to keep communities alive!

The landed estates are now something of a historical anomaly. It's not possible to settle land or set up trusts in the same way without incurring tax penalties now. I don't think we should base a consideration of IHT on an asset structure that is unlikely to be used now.
And yes, this thread is too soon and targeted at someone who took their responsibilities seriously.

I am the owner of a smallish landed estate and I inherited it. It's not in the duke of westminsters league but the principle is the same.

Were I to have to pay IHT then what would have happened is that I would have had to sell significant amounts of land / property to hang on to the main house and hope that I had enough left out of the business empire to rebuild and generate notion income to enable myself to stay in the house our family built over 500 years ago.
In the meantime many long time tenants would have lost their homes and many would have lost their jobs too. They would have to move away from the village that their family has lived in for generations to find work and affordable housing as jobs round here are scarce and property prices high.

The houses I had to sell would have been bought by second home owners (too expensive for most locals) who might drop in for a weekend here and there so your guess is as good as mine how long the local pub and shop would last. The girl who works the bar there in the holidays would have to find another way to find herself through her degree.

In short , the wider rural community would suffer greatly and that is why operating businesses are exempt from IHT as the ones who would truly suffer would be those dependant on the jobs not the big bosses.

Now scale this effect up in accordance with the Dukes massive empire and you begin to get a picture of the massive suffering and hardship that would ensue if the estate was subject to IHT.

But that's okay because the green eyed monsters get to feel all smug and superior, happy in the knowledge that they got one over on 'the toffs'c

Fucking morons - logical , rational thought was never your strong point was it?

And yes , this thread is in incredibly bad taste, the man is probably not even cold yet!

I have met the old Duke several times and Done business with him. I for one hope that the new Duke runs his estate with half the nouse and integrity of the old one.

I had some dealings with Gerald Grosvener many years ago to do with a charity we were both involved in, he was a very fine and philanthropic man, who both worked hard to do right by other people and the best by his family.

I don't think IHT will come into the picture very much with the Grosvener Estates, personal cash and maybe a few other things, but the vast majority is going to be held in trust. Which is probably a good thing for the reasons outlined above. Other IHT issues can be debated another time.

One thing I loved, was the most probably apocryphal story that when the Americans tried to buy the land for their embassy in Grosvener Sq, they offered hundreds and hundreds of millions for the land, were refused, as the family very rarely sell land. They offered even more, into the billions and were still refused. They then petitioned Parliament to get Grosvener to sell, he still refused. Then eventually he came to a compromise, he would sell if the Americans would give back the family lands seized after the war of independence. Basically huge swathes of Maine, New York and Virginia.

The Americans backed down.

Anecdotally, it isn't the landed gentry who are the priviledged wankers. Owning and running an estate is hard work. My DFIL is a game keeper and he says that the estate owners are lovely, friendly, farmer types (even the earls and lords) but it is the weekend shooters who are rude, arrogant and treat the staff like dirt. Those would be the bankers, traders and financiers who pat to pretend to be Lord of the manor at the weekend.
Don't lump estate owners and the titled in with wanker bankers and their ilk.

Cosmic, and there we go with yet another ridiculous comment about those who have made their money vs those who inherited. I have no issue with either.

I support the local community very heavily in all the places I live and employ many people whom I treat very well. There needs to be no competition, I just happen to have made my own money. I have also signed up to Bill Gates' giving pledge and will be giving away over 80% of my estate at death. Attitudes like yours still stink of reverse snobbery.

marina part of the point is that you have to hope the new Duke will do a good job isn't it? It's not right in the 21st century that so many livelihoods should be dependent on one person /family. I have only heard good things about the DoW which is fortunate for those dependent on his estates, if he had been determined to run it into the ground it's not like he could have been sacked, or that tenants could have done anything about it if he decided to sell. Also 'fucking morons'? Nice way to refer to people who don't agree with you.

Cosmic no one has called anyone privileged wankers, this thread has not been personal at all.

Celticpromise
How many people were responsible for the job losses incurred when Barings, Lehman Bros and others went bust?
Surely they were run by committees, or at least several directors or trustees?
As far as I know there was no opportunity to sack these directors; it was too late for that as the businesses had gone under with huge job losses.
Businesses run by committees or boards of directors are just as likely to fall as those run by one person/ family.

It's not right in the 21st century that so many livelihoods should be dependent on one person /family.
I think you might find quite a few BHS employees who agree with you on that!

I have worked my arse off to buy myself a house and pay it off. When I die, DS will inherit it. I've worked hard, and tried to provide for not only myself, but for my own son to be able to have something upon my death. Why the hell should he have to pay additional money to inherit something that I paid for using my own income, which I have already paid tax on?

The inheritance tax position is bound to be badly misreported. I know nothing of this family's arrangements, but it's highly likely most of the wealth is in trust. These trusts do not avoid IHT. Instead of tax being payable at 40% when someone dies (unpredictably), it is paid at 6% every 10 years - so roughly 42% over a lifetime of 70 years. It is payable on predictable dates and plans can be made to fund it without having to break up a business/estate.

"Why the hell should he have to pay additional money to inherit something that I paid for using my own income, which I have already paid tax on?"

He probably won't have to pay any tax on it. At the moment about 3 % of the population are subject to IHT and with the changes being made it is likely to stay this way.

The problem is that in the vast majority of cases through house prices rising etc much of the money hasn't been "taxed" at all and is untaxed gains, so the "taxed once" argument doesn't really ring true.

There current levels of what can be inherited without paying any tax are fair as you only pay 40% of over £325, 000 or £650,000 if your threshold has been transferred. So someone inheriting their parents estate of £1 million would pay £140,000 in tax.

I don't think that's unfair.

there is no desire among the electorate to increase or overhaul inheritance tax

I think there are quite a few people out there who think inheritance tax should be overhauled. People say it's taxing the dead, taxing £££ that's already been taxed etc but lots of taxes tax money that's already been taxed eg VAT, insurance premium tax, fuel tax, anything that comes out money you've already paid income tax on.

I don't think it's taxing the dead, I think it's taxing beneficiaries who are receiving something for nothing. People want public services and properly funded education/NHS etc but want other buggers to pay for it. IHT is one of the least painful ways of feeding extra money into the system. I appreciate there are a few issues such as people having to sell property to pay it, but those could be ironed out.

Stamp duty was iniquitous before it was reformed - and the amounts people have to pay for personal care in their old age is iniquitous. But inheritance tax isn't. And you get a generous allowance of £300+ plus before you have to pay anything at all.

The easiest way to avoid IHT is not to hoard wealth but use your cash while you are alive.

As Bach above says trusts are taxed in particular ways. Grosvenor is not really the person to pick on in relation to lawful tax avoidance particularly.

Also if you can ensure an estate continues it does benefit people. I think it's good that the UK has a mixture of different types of people and some families in it for the long haul to maintain estates, provide jobs etc as a counter balance to commercial companies just in it for the money and the state provision.

I realise this issue divides people a lot however.

Someone asked what I meant about paying tax on investments. I just meant if you have say £100k in shares as I have had in the past (by the way in my case saved up out of income taxed at 40% + and by huge sacrifice and 6 /7 days a week work etc etc althoug yes I'm lucky)....and earn £5k dividends you will pay your income tax on that dividend income. If you sell the shares you will pay your capital gains tax on the sale of those assets.

CelticPromise
That is the way of the world unfortunately, leaders in business or industry generally hold the fates of lots of others in their hands. It is a big responsibility but most of them will have been schooled by their parents in the running of the businesses and estates from childhood.

When I was a kid I wasn't hanging around street corners or spending every day of my summer holidays partying with my mates. I spent a hefty chunk of my time with father taking care of business and (even though I didn't know it when I was very young), being groomed for the day when it was my turn to look after all those who work for us.
Meanwhile friends were off on lads holidays to Ibiza, playing football, going to the pub .
I dare say the new Duke will have had a similar experience.

I stand by the 'fucking morons' comment.
Anyone who thinks that risking the livelihoods of hundreds, or even thousands of ordinary hard working people because of their twisted, jealousy driven obsession with bashing 'the rich' or 'the toffs' IS a fucking moron - and worse!
If they like the idea of that kind of politics then they should fuck off and live in China or North Korea and see where communism / socialism gets you.
A tin shack with no sanitation, that's where! (or if you dare to question the system - prison).
It's easy to pontificate about the 'injustice' of our system and chatter with your oh so goody goody lefty mates while sitting comfortably in your nice warm home in a stable westernised society, while conveniently forgetting the fact that if you were Chineese, Russian, Korean etc then you would most likely be dirt poor.
So where would you rather be?

Manina, I find your comments very offensive. I don't think it is a case of the left bashing the toffs. I think it's about people trying to work out whether there is a way of reducing the vast rift between rich and poor in this country. No one is suggesting that the only way to do it is to sell up estates and sack all the employees. We're just having a discussion about what might or might not be practical. I for one find the comments about the number of people employed by estates useful, so I'm glad that some posters have contributed these, including you. However, I am not seeing the need for such vitriol on your part.

I said 'anecdotally'. I wasn't talking about you.

Look, I try to be fair and balanced but it really annoys me that people can work their entire lives and have most of it taken away at the end. I also detest reverse snobbery. Not all those who are wealthy and inherited it are layabouts.

From all account he was a lovely man who worked hard on his business. What right do any of us have to any share of that?

TooExtraImmatureCheddar

I am sorry that you find my comments offensive, but I stand by them. I firmly believe that is it a case of certain sections of society having a pop at those they see as 'toffs' (god I hate that word).
A society NEEDS to have landlords / bosses / wealth creators regardless of what your leftist ideas may tell you. Every state throughout history that has tried to make things equal has failed miserably and plunged those at the bottom into even deeper poverty. Just a the working man at the 'bottom' of the economic pile props things up, those at the top stop it collapsing downwards too!

The passion with which I make my argument is probably because I have had a lifetime of shit from people (like many on this thread) who cannot see past my big house and family name.
Even my DW's family were highly dubious of me at first (she is from a normal background, grew up in a 3 bed semi on a normal suburban street etc). 15 years later when we got married my FIL admitted that he wasn't sure about her being with 'someone like you' and that certain family members made their mind up about me when they found out who I was (our estate is well know round here so as soon as I tell someone my address they instantly know 'all about me' - or so they think).

We now get on famously by the way because contrary to what the green eyed brigade would have you believe, I am not an over privileged wanker.

It just gets a little tiresome eventually.

I also think that those looking to bridge the gap between rich and poor could look first to people like Sir Philip Green, who should be paying tax on their earnings but have set up their own loopholes.

"No one is suggesting that the only way to do it is to sell up estates and sack all the employees."
TooExtra - if you reduce an estate owner's income then obviously he or she will have to sack some employees. Is it acceptable to you that people's jobs are lost in the name of equality?

Those with large estates often don't have enugh valuable land/rents easily to make them pay these days. The DoW is a rare exception. I don't think that family is one people need to fear. They look after their estates and unlike many have the funds available to do so.

There is a problem in Scotland with their new laws there which may allow a few locals to b uy land but the house owner needs the surrounding land for the income to keep the house up so allowing that kind of confiscatory right which is very popular with the left in Scotland is not the way to go.

We are very lucky to have people like DoW in the UK and to have old as well as new money. It is a useful extra check and balance on political power and company power. It adds to diversity rather than just having people in it for their own earnings - instead they are planning for 300 years time - a nice perspective when politicians can hardly look past never week or at most until the next election.

Scotland is a ticking time bomb, mark my words.. chaos will ensue shortly.
I am SO glad that I don't live in Scotland. A pal of mine had come land there (not loads by Scottish standards, but enough) and heeded the words of advice given to him some years back by an advisor we both trust. 'The SNP will have that off you if they get in laddie', so (in part thanks to this advice) he sold up.

Good move!

• some land

Not choosing to sell something you own is not "hoarding" ffs.