As the Mirror reported this weekend:
Flag-waving former PM Margaret Thatcher may have avoided millions in inheritance tax by keeping a chunk of her fortune offshore.
A copy of Tory Baroness Thatcher’s will shows she left a £4.7million estate to be shared among family members.
But the £12million Central London mansion where the Iron Lady spent the last years of her life is owned by an anonymous trust registered in the British Virgin Islands — a notorious tax haven.
As they also noted:
The house was bought in 1991 by Bakeland Property Limited, an anonymous offshore trust in Jersey, on a 64-year lease. It was sub-leased to a firm of the same name based in the British Virgin Islands.
It is not known who the beneficiaries of Bakeland are. If Thatcher had owned shares in it when she died, inheritance tax would have been due on their value.
Lawyer Andrew Kidd, of Clintons, said: “The shares in the BVI company would be included in Baroness Thatcher’s estate, and subject to UK inheritance tax, in so far as they were in her ownership.”
Thatcher’s financial advisors refused in 2002 to explain why she did not appear to own her own house, and stated: “No one’s going to tell you about that.”
This is an arrangement that has been explored before and it's one that's always left an intriguing question in my mind, which was whether Thatcher was herself a non-dom. I have no evidence to prove it categorically, and her will is not clear on the issue (I have seen it) but Denis was born of a father from New Zealand and so almost certainly acquired New Zealand domicile of origin. He maintained the ties; as is said of his coat of arms:
Sir Denis wanted to celebrate his family history rather than his own achievements. Hence, there is the demi-Lion rampant holding a set of thatcher's shears and two golden chevrons depicting roofs. A circlet of New Zealand fern is in honour of his grandfather who settled there around 1880.
Of course, that may just be nostalgia, or was it good tax planning? Maintaining links with your domicile is vital is you want to show you have not adopted another, and as a matter of fact at one time the Inland Revenue agreed non-dom status really quite readily for those who could show a domicile of origin outside the UK as I suspect on the evidence available that Denis Thatcher might have been able to do.
The curious fact would then be that if Denis Thatcher did have non-dom status then so would Margaret Thatcher have had it. That's because they married in 1951 and until 1974 the common law position of married women was that the domicile of a married woman was that of her husband; that is, she acquired a domicile of dependence from him. Her domicile thus changed with his. In other words, if Denis Thatcher was not domiciled (and that is plausible, but, I stress, not certain) then so could Margaret Thatcher have been.
And that would offer an easy explanation for the offshore ownership of the property Thatcher lived in for decades because, as has been noted by a conference review in Tax Analysts today (firewall):
Another audience member argued that the purchase of U.K. property by people using offshore companies isn't so "scandalous" because those purchases may be made by U.K. residents who qualify as non-domiciles. "You're not naive," the audience member said. "You understand the concept of resident non-domicile, and you understand that successive U.K. governments have allowed U.K. resident non-domiciles some tax advantages that are perfectly legitimate. A lot of what you said is very relevant, but there's a level of naivete if you don't accept that there are genuine reasons for people to own offshore companies."
Well of course there are such genuine reasons - they relate to tax avoidance and have only really benefited non-doms for a long time. I can't say with certainty that Margaret Thatcher was not domiciled in the UK; the evidence is not clear (although the grant of probate does, rather curiously, relate only to assets in the UK, which may be significant in this context) but the possibility has to be considered, and would provide a surprising new angle from which to view this truest of British prime ministers.