Revelations of a corporate structure set up by Blunkett that would divert
income from his memoirs without incurring income tax broke last week. Lawyers
acting for the former home secretary insisted to Accountancy Age this week that
his arrangement would not change his own IHT position.
Blunkett recently disclosed in the parliamentary register of members’
interests that he had set up Hadaw Productions and Investments to attract the
income from royalty rights for his journals. Hadaw’s directors include three of
his sons, Hugh, Alastair and Andrew.
The set-up is commonly used by footballers, pop stars and film stars to
minimise tax, said Mike Warburton, tax partner at Grant Thornton.
Hadaw’s business address – 5 Elstree Gate, Borehamwood – is the same as that
of Ivan Sopher & Co, which is advising Blunkett on Hadaw.
The accountancy firm issued a client briefing last year outlining how to
avoid IHT. One section – ‘How to save up to £110,000!’ – detailed the use of
nil-band discretionary trusts. Another outlined ways of gifting the family home.
Chancellor Gordon Brown has made strenuous efforts to crack down on home
transfers with the pre-owned asset rules in particular.
Life assurance plans, business property relief and pension planning are also
covered in the briefing. All the schemes are perfectly legal.
Blunkett last week wrote a pamphlet for the Resolution Foundation think-tank,
which said that there was ‘a strong argument for reshaping inheritance tax and
clamping down on the mechanisms used by the rich to avoid paying it’.
A spokeswoman said: ‘I’ve got nothing to add. It’s his private business.
Anything in the public interest is in the public arena.’
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states