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Sir Keir Starmer was grilled at the start of the Labour conference over allegations that he previously avoided an inheritance tax bill.
The prime minister denied putting a seven-acre field he bought behind his parents’ property into a trust, which would have allowed him not to pay inheritance tax.
He said he bought the land in 1996 to use as a donkey sanctuary, so his mother and father could care for the animals.
Sir Keir gave the land to his parents through a structure which meant when they died, the field’s value was excluded from their estate, The Sunday Times reported over the weekend.
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Keir Starmer was asked about the field on the BBC’s ‘Sunday With Laura Kuenssberg’ programme (PA)
Asked if he put the land into a trust on the BBC’s Sunday With Laura Kuenssberg programme, Sir Keir replied: “No, I didn’t.”
“I bought a field for my mum and my dad because they loved donkeys,” he said, adding: “My mum was very ill and she couldn’t move around anymore.”
Here are the key questions around the story:
Why has this issue come to light now?
This is not the first time the prime minister’s donkey field has made headlines, with the Mail on Sunday pointing out in 2020 – when he was leader of the opposition – that the seven acres of land had a potential value of up to £10m.
This would prove a sizeable overvaluation. Sir Keir bought the field behind his parents’ house for £20,000 and sold it for almost £300,000 in 2022.
He forgot to declare this to parliamentary authorities for several years as an MP, which he apologised for. In a statement to the parliamentary standards commissioner in 2022, he said: “I immediately gifted the land to my parents for as long as they should live but I did not transfer the legal title – that remained with me.”
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A young Starmer and his parents in the 1980s (Starmer family)
It was suggested by legal experts, commenting in The Sunday Times, that “gifted suggested a trust may have been created, which they claimed could help the prime minister avoid any inheritance tax liability when his parents died.
Tax expert Dan Neidle, who worked on the story with the paper, said this wording suggested that Sir Keir “created a life-interest trust: his parents could use the field for the rest of their lives, but ownership would revert to him when they died. That structure had the effect of keeping the field outside his parents’ estate for inheritance tax purposes.”
“As things turned out, it [would likely have] made no difference, as their estate was probably below the threshold.”
Sir Keir’s mother died in 2015 and his father in 2018. Their estates were not estimated to be large enough to attract inheritance tax.
What does Starmer say about it?
The prime minister has denied that any trust was created. Speaking to Ms Kuenssberg, he said that he bought the land because he was working as a lawyer at the time and so could afford to give the gift to his parents.
“My mum was very ill and she couldn’t move around any more,” he said. “She, by the end of her life, had her leg amputated and she could barely communicate. She was very, very ill.
“She loved her donkeys and I wanted her to be able to see her donkeys. I was a lawyer, I had quite a lot of money, I bought a field for £20,000 at the back of their house. I said: ‘Here’s your field. It’s yours for as long as you may live.’”
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The increased scrutiny comes after former deputy PM Angela Rayner was forced to resign earlier this month over tax issues (PA)
He added: “The idea of setting up some complicated trust for a £20,000 agricultural field which then housed four donkeys? It was so my mum, she was able to – they had a little outhouse at the edge of the field – and she was able, in the end, to see the donkeys. My dad built a little sort of porchway so he could wheel the wheelchair out so she could touch the donkeys. That’s what it was for. I gave it to them.”
The prime minister said he was not considering any tax implications at the time, but has, in recent weeks, asked a KC with tax expertise to make sure the correct amount of tax has been paid at every stage.
Why has this denial taken so long?
In its original statement to The Sunday Times when it was working on the story, No 10 did not categorically deny the existence of the trust as Sir Keir has now done.
Mr Neidle said his denial was “hard to understand when The Sunday Times has been asking Sir Keir about a trust for a month, and he at no point denied there was a trust”.
A Downing Street spokesperson told The Sunday 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 … 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.”
The prime minister’s clarification makes clear that there was no complex legal structure created to avoid inheritance tax, with the increased scrutiny coming after former deputy PM Angela Rayner was forced to resign earlier this month following issues around her underpayment of stamp duty.