...ensuring your estate is in order
With the tragic passing of the Duke of Westminster – Gerald Cavendish Grosvenor – the estate of Britain’s 3rd richest man has been left to his 25-year-old son.
Examining the legal implications of the Duke’s sudden death, Sarah Ali – Solicitor in the Wills and Probate team – explains why the £9billion estate will be left to his son and outlines the hefty inheritance bill that the family could be facing.
The late Duke has four children, three daughters and one son, 36-year-old Lady Tamara is the eldest; however the Duke’s entire £9billion fortune will be inherited by 25-year-old Hugh Grosvenor.
This is due to primogeniture, which outlines under common law that the firstborn son inherits his parent’s main estate, in preference to any siblings, even if the firstborn son has older sisters.
This means that alongside 100 acres of Mayfair and 200 acres of Belgravia – 2 of the most expensive locations in the UK – young Hugh, who is Godfather to Prince George, will also inherit the seat in Cheshire, Eaton Hall, and will become the 7th Duke of Westminster.
It is expected that the Duke’s daughters will inherit sizable trust funds; however the vast bulk of the family fortune will be inherited by the 25-year-old.
Primogeniture also applied to the British monarch, until the Succession to the Crown Act was passed in 2013, ensuring that the British throne would pass to the firstborn child of the Duke and Duchess of Cambridge, regardless of whether they were a boy or a girl.
Gerald Cavendish Grosvenor’s inheritance
Ironically it was because of a surprise inheritance that Gerald found himself in the position of Duke, as his own ambition growing up was to become a beef farmer.
He inherited vast wealth and became the 6th Duke of Westminster when his Uncle died without heirs, thus passing the estate on to Gerald at the age of 27.
Close family friends to the Royals – the Duke himself was executor of Princess Diana’s Will – the Grosvenor name is synonymous with luxury accommodation and is one of the most lucrative property companies in the UK.
The richest property developer in the UK, Gerald – who died of a sudden heart attack – has estates in Oxford, Cheshire, and Scotland, as well as owning large parts of affluent Mayfair and Belgravia.
Inheritance tax on large estates
Due to the sudden and tragic nature of the Duke’s death, there might not have been a coherent inheritance plan in place and his estate could be taxed to the tune of £3.6billion before the fortune is passed on to his son.
With large estates such as these however, it is unlikely that HMRC will be able to collect this bill however, as Sarah explains:
“While there may be the collection of some tax, it is highly unlikely that the full 40% bill will be taken from the £9billion estate.”
“Despite the sudden nature of the Duke’s death, it is likely that most of the family wealth is tied up in various trust funds, if this is the case then the main trust – and the wealth held therewith – will be passed onto the Duke’s son without the owing of any tax.”
“Another way to pass on inheritance without tax is to make gifts whilst you are alive, if this is done 7 years before death then no tax will be owed, however due to the tragic nature of the Duke’s death it is uncertain whether he made any gifts to his family.”
“In the coming days and weeks we may see further questions around primogeniture laws, which are the reason that the estate is passing to the Duke’s son, instead of to his wife or eldest child.”
“The law was placed under the spotlight of public opinion last year when Lady Kinvara Balfour described primogeniture laws as ‘bonkers’ after her father’s – the 17th Duke of Norfolk – estate was left to her younger brother instead of her mother (which, it is claimed, was the inspiration for a storyline on popular period drama Downton Abbey).”
Written by Sarah Ali
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