The facts<\/p>\n
The history is as follows:<\/p>\n
In 1996, Keir Starmer bought a seven acre field<\/a> adjacent to his parents\u2019 house and garden (long before he became an MP). The price was \u00a320,000. There were donkeys on the field \u2013 the purpose of the purchase<\/a> was so his parents could look after rescue donkeys.<\/p>\n Mr Starmer became an MP in 2015<\/a>. MPs are required to register<\/a> land\/property in the Register of Members Interests<\/a> if it\u2019s worth \u00a3100,000 or more. Mr Starmer didn\u2019t register the field.<\/p>\n Mr Starmer\u2019s mother died in 2015; his father died on 1 December 2018. The net value of their estate (mainly their house) was \u00a3374,091. Mr Starmer was an executor of their estates.<\/p>\n In 2020, the Daily Mail reported that the field could be worth \u00a310m<\/a>.<\/p>\n In January 2022, Mr Starmer had the field valued \u2013 it was worth more than \u00a3100,000 (but nowhere near \u00a310m).<\/p>\n That means Mr Starmer should have declared the field in the Register of Members Interests at some point. Soon after Mr Starmer obtained the valuation, his office contacted the Parliamentary Commission for Standards to correct his entry in the register.<\/p>\n In May 2022, Mr Starmer agreed the sale of the field, together with a strip of land previously owned by Mr Starmer\u2019s father. Mr Starmer\u2019s share of the proceeds was around \u00a3295,000.1<\/a><\/p>\n In June 2022 there was an investigation by the Parliamentary Commissioner for Standards<\/a> into Mr Starmer\u2019s failure to register the field, which ended in Mr Starmer apologising and the register being retrospectively amended.<\/p>\n Technical terms in this article<\/p>\n The life interest trust<\/p>\n I discussed the sale of the field with the Sunday Times earlier this year. I noticed a phrase Mr Starmer used in his correspondence<\/a> with the Parliamentary Commissioner for Standards:<\/p>\n Most lawyers will read \u201cfor so long as they should live\u201d as meaning Mr Starmer created a life interest trust. That was my immediate view, and the Sunday Times instructed a KC who agrees. <\/p>\n Mr Starmer has neither confirmed nor denied that he created a trust \u2013 but it seems a fair assumption that he did (or surely the story would have been denied). <\/p>\n Mr Starmer\u2019s office says that, after the Sunday Times started asking questions about the arrangements, Keir Starmer engaged a leading tax KC to advise, and that all tax was fully paid.<\/p>\n How a life interest trust works<\/p>\n If we\u2019re right that Mr Starmer created a life interest trust2<\/a>, then it worked like this:<\/p>\n Mr Starmer was listed on the land registry as owning the field.<\/p>\n His parents were beneficiaries of the land during their lifetime. They could use it as they wished, and receive any income from the land. But they could not dispose of it.<\/p>\n When his parents died, the trust ended and the land became wholly owned (legally and beneficially) by Mr Starmer. <\/p>\n I suspect a non-lawyer in Mr Starmer\u2019s position wouldn\u2019t think to do this. They would either own the land themselves (but let their parents use it) or give it to their parents outright.<\/p>\n Why not just let his parents use it? We don\u2019t know, but we can speculate that they wanted his parents to \u201creally\u201d own the field, rather than just being permitted to use it. That is sometimes important to people.<\/p>\n Why not a gift, and then inherit the land when his parents died? There are at least two possible reasons:<\/p>\n Parents often wish their children to share property equally, and their Wills reflect that. Mr Starmer might expect to receive the field himself; that would require changing his parents\u2019 Wills.<\/p>\n If he gave the field to his parents outright, it would have formed part of their estate for inheritance tax purposes. But property in a life interest trust that reverts to the settlor does not, because of section 54(1) of the Inheritance Tax Act 1984<\/a>.<\/p>\n So in a way the trust gives the best of both worlds: his parents owned the property when they were alive, but with no need to change their Will, and no need for probate when they die. And it potentially avoids inheritance tax.3<\/a><\/p>\n (However this is a very complex area, with laws that frequently change. Please don\u2019t take anything in this article as advice.)<\/p>\n Did Mr Starmer actually avoid inheritance tax?<\/p>\n This is certainly not a case where Mr Starmer failed to pay tax that was legally due. But did the trust reduce the Starmer family\u2019s inheritance tax bill?<\/p>\n Mr Starmer\u2019s office told the Sunday Times that \u201cGiven the size of the estate, the inclusion or not of the field in their estate made no difference to the estate\u2019s IHT liabilities.\u201d <\/p>\n How plausible is that?<\/p>\n If there had been no trust, and the field had been included in his parents\u2019 estate (at its sale value), then the net value of the estate would have been about \u00a3670,000. That\u2019s significantly less than the \u00a3875,000 combined exempt amount from both parents\u2019 \u00a3325k nil rate band<\/a> plus his \u00a3125k residence nil rate band<\/a> and her \u00a3100k residence nil rate band<\/a>.4<\/a><\/p>\n In this scenario there was no tax to avoid \u2013 his parents\u2019 estate was worth considerably less than the IHT threshold, and nothing he could have done with the field would have changed that.<\/p>\n However those numbers assume that Mr Starmer\u2019s mother used none of her nil rate band or residence nil rate band, leaving his father with a \u00a3875,000 combined exempt amount. That\u2019s a reasonable assumption, because most married couples hold their home as joint tenants (so it\u2019s inherited automatically and not under the Will) and Will almost all (or all) of their other property to their surviving spouse.5<\/a> However if that assumption is significantly wrong \u2013 for example because Mr Starmer\u2019s mother gave gifts6<\/a> of more than \u00a3205k to someone other than her husband, then Mr Starmer\u2019s father\u2019s estate would probably have had an inheritance liability if the field hadn\u2019t been held on a lifetime trust.<\/p>\n I\u2019d therefore conclude that it\u2019s possible that the trust reduced the inheritance tax bill, but Mr Starmer has said it didn\u2019t, and the facts are consistent with that.<\/p>\n Did Mr Starmer try to avoid inheritance tax?<\/p>\n The short answer is that we don\u2019t know.<\/p>\n The residence nil rate band didn\u2019t exist in 1996 and Mr Starmer could have rationally expected rising property values or even the development potential of the field to result in his parents\u2019 estate being subject to inheritance tax. He might have decided that a trust was therefore better tax planning than giving his parents the field. Whether we call that tax avoidance is a political\/ethical question, not a legal question (but, either way, it wasn\u2019t something HMRC would be able to challenge).<\/p>\n Or it could just have been an experienced lawyer\u2019s way of giving the field to his parents whilst they were alive, with tax not entering into Mr Starmer\u2019s calculation.<\/p>\n Mr Starmer hasn\u2019t been willing to explain why he created the trust. All his team would say to the Sunday Times is:<\/p>\n \u201cKeir Starmer\u2019s decision to allow his parents to use a field he bought them for \u00a320k in the late stages of their lives had nothing to do with any tax considerations. He simply wanted to help his parents keep donkeys.\u201d<\/p>\n That doesn\u2019t really answer the question. Nobody\u2019s suggesting he let his parents use a field for tax reasons. The question is whether he created a trust for tax reasons.<\/p>\n My personal view is that, if he did, this wasn\u2019t tax avoidance \u2013 because the tax outcome he achieved was the same as if he\u2019d owned the field himself but let his parents use it. That contrasts with some uses of trusts to (supposedly) magically eliminate tax liabilities \u2013 they are definitely tax avoidance, and usually don\u2019t work (and may even constitute tax evasion).<\/p>\n However there is no single legal definition of \u201ctax avoidance\u201d, and others may disagree. I\u2019ve written about the difficulty of defining \u201ctax avoidance\u201d<\/a>.<\/p>\n Some disclosure: I\u2019m a member of the Labour Party; I was previously a member of its senior disciplinary body (the National Constitutional Committee) but have stood down. I have no formal role in the Labour Party, and I advise policymakers in all parties. Generally that\u2019s on \u201cbackground\u201d\/unofficial: my one official role is that I\u2019m a member of the SNP Scottish Government\u2019s\u00a0tax advisory group<\/a>. I also participate in Government consultations, and speak to officials and occasionally politicians as part of those consultations (and have done so for many years, under previous Governments).<\/p>\n Many thanks to Gabriel Pogrund and the Sunday Times. Thanks to S for her expertise in trust taxation.<\/p>\n","protected":false},"excerpt":{"rendered":"When Keir Starmer gave a field to his parents, he used a \u201clife interest trust\u201d. This meant that,…\n","protected":false},"author":2,"featured_media":166144,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[49,50,51,47,52,48],"class_list":{"0":"post-166143","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-headlines","9":"tag-news","10":"tag-top-news","11":"tag-top-stories","12":"tag-topnews","13":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/166143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=166143"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/166143\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/166144"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=166143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=166143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=166143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Land](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/09\/starmer_trust.jpg\")
<\/p>\n