Advising clients on wills and trusts, or at least knowing where to refer them to get the best such advice, is something all financial advisers should consider part of their normal routine.  Done properly, this allows clients to benefit from similar structures to those enjoyed by the Duke of Westminster and can also be a very good income stream for an adviser’s practice.




Gerald Cavendish Grosvenor, the 6th Duke of Westminster, died on Tuesday 9th August 2016.  Immediately following his death there has been a lot of media attention on whether or not any Inheritance Tax will be paid and, if so, how much.  According to The Sun the duke’s family will “avoid paying billions in Inheritance Tax”, whereas The Financial Times has said “the estate … could be landed with a tax bill running into billions of pounds.”


There is clearly some uncertainty about the tax that will eventually be paid.  There is also little doubt that the trust structure, which includes ownership of the massive property group, Grosvenor Group Limited, means less Inheritance Tax will be paid than would have been the case if the 5th duke, Robert George Grosvenor, had not placed much of the family’s wealth in trust.  When the 5th duke died, the family wealth was estimated to be around £650 million, but the estate for Inheritance Tax purposes was reported to be less than £5 million.


What most commentators seem to have missed is that Inheritance Tax is rightly called a “voluntary” tax.  According to the Institute of Fiscal Studies, in 2014-15 Inheritance Tax was only 0.6% of total government revenue whereas Income Tax and National Insurance was nearly 43%, so perhaps it is not particularly surprising that there are plenty of ways to reduce or eliminate Inheritance Tax liabilities.  If you are a financial adviser I am sure you could very quickly list some of those ways, and I suspect the use of trusts would not be very high on the list, especially since the recent changes to the Inheritance Tax regime for trusts.


The same commentators also seem to have missed the fact that the Grosvenor Group Ltd, owned by the trust set up by the 5th Duke with the Grosvenor family as beneficiaries, paid over £76 million in tax in 2015 (see page 25 of the Grosvenor Group Ltd Annual Report for 2015).  This does not particularly suggest the family do everything possible to avoid paying any tax.


If the family are not particularly using the trust structure to avoid paying any tax, then why have such a structure in the first place?


The main reason so many wealthy families use a trust structure is to protect that wealth from a wide variety of threats and to try to ensure the wealth remains within the family rather than being dissipated, for example, by divorce settlements.  Such a structure effectively allows the settlor to continue to control his or her wealth from beyond the grave in ways that are simply not possible with simply a standard will.


According to a report in The Telegraph the day after the duke’s death, setting up and maintaining a trust structure is prohibitively expensive for all but the wealthiest families.  But this is simply not true.  Any family that can afford the services of a good financial adviser can also afford to set up a trust structure giving their beneficiaries a similar level of protection to that enjoyed by the Grosvenor family.  Also, once they realize the enormous benefits such a structure can provide, most are very interested in setting up their own family trusts.


We run monthly free training sessions on how to take advantage of the massive trust structure opportunities that far too many advisers are missing altogether.  Contact us on 023 8089 2222 for further information.