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Starmer contradicts past response when asked if he aimed to avoid tax

At the beginning of September, deputy PM and housing minister Angela Rayner had to resign after it emerged she’d underpaid stamp duty. Keir Starmer’s government has experienced several major scandals since then, with the latest revolving around the prime minister himself:

Starmer has now made a statement which seems to directly conflict with the available evidence:

Donkey

According to the Times article, Starmer established a trust which potentially meant there would not be inheritance tax owed on land being used by his parents. The land in question is the infamous ‘donkey field’ which Starmer said he purchased for his parents to establish a donkey sanctuary. As the Times reported:

Had Starmer simply given them the land as a gift, it would have formed part of the father’s estate. As executor of the will, he would have been required to have the land valued and to have submitted details to HM Revenue & Customs within a year as part of the probate process.

Yet the nature of the trust meant the land was always deemed to belong to him personally. No valuation of the land was required and it was left out of inheritance tax calculations.

The Times spoke with tax expert Dan Neidle who described the arrangement as a “tax-efficient structure”. According to Neidle, the setup allowed his parents to essentially own the donkey field in their lifetime without the land later incurring inheritance tax.

As the Times notes, Starmer has spoken out against “legal tax avoidance” (i.e. using schemes to pay less tax). Starmer has a history of making such statements, including during his leadership campaign in 2020:

He also spoke out against tax avoidance schemes in the runup to the 2024 election:


Starmer infamously dropped most of the 10 Pledges from his leadership campaign.

Starmer: questions unanswered

The Times article notes that changes to inheritance tax law mean that by the time Starmer’s father died there may not have been any tax due on the property. This is because thresholds increased under the Conservatives in 2017, and also that there could have been as much “as £425,000 in additional allowances transferred from his mother”.

Journalist Gabriel Pogrund notes that when Starmer first purchased the donkey field in 1996, it would have been more likely the land would incur inheritance tax. He adds that Starmer had two options which were ‘simpler’ than the trust he established, which were:

  • Giving them the field.
  • Retaining ownership but letting them use it.

In a long thread exploring the possibilities, Neidle noted:


Pogrund also said:

– We went to No10 months ago with a number of queries. the PM has demanded transparency and railed against legal tax avoidance – saying the money better spent on the NHS – but he would not answer Qs in detail.

– He spent a day with top KC in Downing St but then simply said all taxes were paid.

– We went back with Qs about the trust weeks ago – a list of clear, fair inquiries, with plenty of time to answer, and none assuming any wrongdoing or bad faith. But the PM will only go as far as saying, whatever the arrangement was, he paid all his taxes, and did not have tax in mind in creating it.

A Downing Street spokesperson told the Times:

Keir Starmer bought a field for his parents to use for their donkeys during his parents’ lifetime. He did not give any thought at the time to any tax considerations. His only consideration was the wellbeing of his parents.

They added:

Keir Starmer engaged a leading tax KC to give him comprehensive advice on all the taxes paid. He confirmed that there had been absolutely no underpayment of taxes.

As noted above, Starmer has claimed this morning that he did not use a trust, with Neidle responding:

Pogrund, meanwhile, said the following of Starmer’s claim it was a ‘gift’ and not a ‘trust’:

as we know, it was not a gift. He has said previously: the title “remained with me” – meaning the land still never fell within their estate for IHT purposes.

We’ll bring you more on this story as it develops.

Featured image via BBC

By Willem Moore

This post was originally published on Canary.