As the Mirror reported this weekend:
Flag-waving former PM Margaret Thatcher may have avoided millions in inheritance tax by keeping a chunk of her fortune offshore.
A copy of Tory Baroness Thatcher's will shows she left a £4.7million estate to be shared among family members.
But the £12million Central London mansion where the Iron Lady spent the last years of her life is owned by an anonymous trust registered in the British Virgin Islands — a notorious tax haven.
As they also noted:
The house was bought in 1991 by Bakeland Property Limited, an anonymous offshore trust in Jersey, on a 64-year lease. It was sub-leased to a firm of the same name based in the British Virgin Islands.
It is not known who the beneficiaries of Bakeland are. If Thatcher had owned shares in it when she died, inheritance tax would have been due on their value.
Lawyer Andrew Kidd, of Clintons, said: “The shares in the BVI company would be included in Baroness Thatcher's estate, and subject to UK inheritance tax, in so far as they were in her ownership.”
Thatcher's financial advisors refused in 2002 to explain why she did not appear to own her own house, and stated: “No one's going to tell you about that.”
This is an arrangement that has been explored before and it's one that's always left an intriguing question in my mind, which was whether Thatcher was herself a non-dom. I have no evidence to prove it categorically, and her will is not clear on the issue (I have seen it) but Denis was born of a father from New Zealand and so almost certainly acquired New Zealand domicile of origin. He maintained the ties; as is said of his coat of arms:
Sir Denis wanted to celebrate his family history rather than his own achievements. Hence, there is the demi-Lion rampant holding a set of thatcher's shears and two golden chevrons depicting roofs. A circlet of New Zealand fern is in honour of his grandfather who settled there around 1880.
Of course, that may just be nostalgia, or was it good tax planning? Maintaining links with your domicile is vital is you want to show you have not adopted another, and as a matter of fact at one time the Inland Revenue agreed non-dom status really quite readily for those who could show a domicile of origin outside the UK as I suspect on the evidence available that Denis Thatcher might have been able to do.
The curious fact would then be that if Denis Thatcher did have non-dom status then so would Margaret Thatcher have had it. That's because they married in 1951 and until 1974 the common law position of married women was that the domicile of a married woman was that of her husband; that is, she acquired a domicile of dependence from him. Her domicile thus changed with his. In other words, if Denis Thatcher was not domiciled (and that is plausible, but, I stress, not certain) then so could Margaret Thatcher have been.
And that would offer an easy explanation for the offshore ownership of the property Thatcher lived in for decades because, as has been noted by a conference review in Tax Analysts today (firewall):
Another audience member argued that the purchase of U.K. property by people using offshore companies isn't so "scandalous" because those purchases may be made by U.K. residents who qualify as non-domiciles. "You're not naive," the audience member said. "You understand the concept of resident non-domicile, and you understand that successive U.K. governments have allowed U.K. resident non-domiciles some tax advantages that are perfectly legitimate. A lot of what you said is very relevant, but there's a level of naivete if you don't accept that there are genuine reasons for people to own offshore companies."
Well of course there are such genuine reasons - they relate to tax avoidance and have only really benefited non-doms for a long time. I can't say with certainty that Margaret Thatcher was not domiciled in the UK; the evidence is not clear (although the grant of probate does, rather curiously, relate only to assets in the UK, which may be significant in this context) but the possibility has to be considered, and would provide a surprising new angle from which to view this truest of British prime ministers.
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I remember the ghastly party conferences with Union Jacks abounding and Elgars Nimrod playing (abusively, in my view). One knew it was all gut-wrenching cant and hypocrisy of the worst sort, this is just more evidence of it. Thatcher opened the floodgates of scam, rip-off, graft, grift and bloated CEO’s -the stench of it succeeds her burial.
As you say Richard, it’s not entirely clear that Thatcher was a nondom, but it would all fit with her ideology that the government has no money, only that which it gets from the taxpayer. Ergo, tax avoidance is absolutely OK.
As is so often the case with right wingers, black is white, and white is black. The people who make the most noise about “patriotism”, like Thatcher and her fawning acolytes, are actually those who contribute the least to this country, whilst draping themselves with the union jack.
Samuel Johnson’s oft quoted remark about false patriotism seems apt here.
It is quite obvious that Baroness Thatcher was UK domiciled at the date of her death.
Part 4 of the Constitutional Reform and Governance Act 2010 provides that members of the House of Commons (MPs) and House of Lords (Peers) are deemed resident, ordinarily resident and domiciled in the UK for the purposes of income tax, inheritance tax and capital gains tax.
Even if that wasn’t the case she would have had a deemed domicile for IHT under the more usual rules.
Deemed domiciled for IHT rules, I agree – but that does not apply for other purposes
And not necessarily at the time the trusts I refer to may have been created – which does not rule out the benefit
I do not think you disprove the idea
Do I recall you saying you have dual citizenship?
So you may well be a non-dom yourself.
I know nothing about your domicile status or tax affairs just as you know nothing about Mrs Thatcher’s.
But let’s chuck some mud around. Some of it is bound to stick.
I do have dual citizenship
I am not a non-dom
And I have never claimed to be
Nor has any member of my immediate family ever claimed to be to the best of my knowledge – I doubt if any are even aware of it
Nor have I ever been non-resident
For the record
A little history:
http://www.theguardian.com/world/2008/dec/05/bae-armstrade
The name Hugh Thurston crops up here – he was (apparently) Mrs T’s financial adviser, and also one of the two men behind the Jersey end of Bakeland Property. He is no longer available for comment, having died in September 2012.
And Tony Blair’s fortune, amassed only as a result of him having been our PM?
Have you investigated that yet?
Yes….
I won a prize for it
Hah… well the guy asked.
I don’t see things as clearly as yourself.
To options exist in my mind. Neither of which are the same as yours.
Either. A close friend owns her house. The PM didn’t make that much money during her time. A friend helped her live in London.
Or. She had already given it to her grand children. I feel that is something she would do. Why Not? So the trust will be designed to factor in the two American adults.
Then again it might have been something to do with her son.
Tony
I think your second suggestion re the US grandchildren is “very warm”
I can see it now, a skiffle group with Carole and Mark after Lonnie Donegan. My old man’s a non-dom, he wears a non-dom’s hat, he wears gor blimey trousers and didn’t live in a council flat. It should go to Number 1, at least in Hampstead.