For those getting ready to teach trusts in the new school year, there is an interesting, and very clear, example of the tax benefits of trusts in today’s London papers.

As many of you probably know, the Duke of Westminster died this past week. The third richest man in England, his ancestral estate includes a large part of Belgravia and Mayfair, and is estimated at around £9 billion. In fact, the Duke has the freehold on the land under the US Embassy.

Normally, such an inheritance would attract a 40% death duty (roughly £3.6 billion in tax). However, his lordship’s 25-year-old son and heir will likely pay almost no tax because the estate is structured as discretionary trust.

Two articles clearly explaining the problem (and showing the breadth of the London estate) can be found at:

http://www.telegraph.co.uk/tax/inheritance/inheritance-tax-and-how-the-dukes-of-westminster-avoid-it-on-the/

https://www.theguardian.com/money/2016/aug/11/inheritance-tax-why-the-new-duke-of-westminster-will-not-pay-billions

Although many students’ eyes glaze over when talk of tax comes up in the trusts course --- especially on the first day --- this case might drive home the point in an interesting and fun way.

Kind regards.


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Matthew P Harrington
Professeur titulaire
Faculté de droit
Université de Montréal
514.343.6106
matthew.p.harrington@umontreal.ca
commonlaw.umontreal.ca
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