Duke of Westminster’s wealth held in trusts and food-producing farms that are tax-exempt and ensure it remains in the family

The late Duke of Westminster’s fortune might have been worth a fraction of the £9.35bn his four children stand to inherit, were it not for an old war wound and a 12-year legal battle.



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In 1944 the 4th Duke received a leg injury from a shell while commanding his regiment. The law states that those who die in the service of their country are exempt from death duties. The duke went on to live another 23 years, eventually dying of cancer at the age of 60.

The estate passed to his brother, Robert Grosvenor, who successfully argued that the wound had caused infections which eventually led to cancer. By 1970 Robert was the richest man in Britain.

The 6th duke’s children will owe their fortune to rules that give generous concessions to the trusts used by Britain’s wealthiest families. With death duties at 40%, the heirs could have been liable for a £3bn plus tax bill but the taxman is not expecting a huge windfall.

The late duke once said of his fortune: “Given the choice, I would rather not have been born wealthy but I never think of giving it up. I can’t sell. It doesn’t belong to me.”

In the eyes of the law, this is correct. His assets were owned by a series of trusts, which come under the umbrella of the Grosvenor estate. The estate’s trustees control the property business, via Grosvenor Group Limited; Wheatsheaf, a food and energy business, which runs the farms; a fine art collection and a series of cash investments; rural land holdings in Lancashire, Sutherland and Wales; and the family seat at Eaton Hall near Chester.

“The benefits of trusts are that they don’t form part of somebody’s estate,” explains Ian Dyall, a manager at Towry, a tax planning adviser. “In a discretionary trust you have a whole pick list of potential beneficiaries which the trustees can choose to appoint benefits to, but no individual beneficiaries can demand money. Money can stay in the trust and cascade down generation to generation for up to 120 years and nobody pays inheritance tax on it.”

Trusts are liable to one form of inheritance tax: every 10 years, HM Revenue and Customs is entitled to claim 6% of the value of the trust fund. However, the Grosvenor estate could benefit from several exemptions. For instance there are waivers for food-producing farms and for trading businesses that employ real people. Grosvenor and the rural estates employ about 1,000 staff – and the numbers are prominently advertised on their websites.