Starmer denies sheltering £320k donkey field from inheritance tax

Sir Keir Starmer has denied sheltering a £320,000 donkey field that he gave to his parents from inheritance tax.

The Prime Minister purchased the seven-acre plot of land in Oxted, Surrey for £20,000 in 1996, handing it to his parents who used it to look after neglected donkeys.

Sir Keir has denied a claim in the Sunday Times that he placed the field within a trust, meaning that its value was not included in his parents’ estate – which he benefited from – when they died.

Asked if he put the field in a trust, Sir Keir told the BBC’s Sunday with Laura Kuenssberg: “No I didn’t. I bought a field for my mum and my dad because they love donkeys and my mum was very ill and she couldn’t move around any more.

“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.”

Three years ago, Sir Keir sold the field and a small plot of adjacent land, which belonged to his father, for £320,000. The field was valued at around £295,000 as part of this purchase.

Sir Keir’s tax records show that he paid £52,688 in capital gains tax on the sale of the land in December 2022.

In a later statement to the Parliamentary Commissioner for Standards, he said: “On Dec 9 1996 I purchased the land in question.

“I immediately gifted the land to my parents for so long as they should live but I did not transfer the legal title – that remained with me.”

The Sunday Times claimed that this meant Sir Keir had set up a trust to own the land, meaning that it did not need to be valued after his father’s death and was omitted from inheritance tax calculations.

Dan Neidle, a tax expert, told the Sunday Times that the arrangement was a “tax-efficient structure” for Sir Keir.

He said that the law meant that “the field belonged to his parents during their life, but wouldn’t be subject to inheritance tax when they died”.

However, the Prime Minister denied this and appeared to suggest instead that he owned the land outright himself and let his parents use it. As a result, it was never part of his parents’ estate and no inheritance tax was due.

He said: “I was a lawyer, I had quite a lot of money, I bought a field for £20,000 at the back of their house and I said here’s your field, it’s yours for as long as you may live [...] I didn’t create a trust, I simply bought a field and I said to mum and dad ‘this is for you’.”

The Sunday Times reported that even if a trust had been set up, in practice the value of Sir Keir’s parents’ estate was low enough that the field would have been exempt from tax anyway.

Downing Street has insisted that Sir Keir “did not give any thought” to tax considerations and was only concerned for the welfare of his parents.

The Prime Minister has stressed that politicians should be entirely scrupulous about their tax affairs, previously saying: “Those in charge of taxation can’t also be seeking to avoid it.”

Sir Keir has faced anger from farmers who he will soon force to pay inheritance tax for the first time.

The levy, which has been branded a “family farm tax”, will kick in next year on estates worth more than £1.5m, or £3m for married couples.

The policy was announced in Rachel Reeves’s first budget last year and has already prompted a record number of agricultural businesses to close down.

‘One rule for Starmer, one for everyone else’

Kevin Hollinrake, the Tory chairman, claimed that the Sunday Times report showed a further example of there being “one rule for sanctimonious Starmer and co, and another for everyone else”.

In 2022, it emerged that Sir Keir had hidden his ownership of the seven-acre field from the Commons authorities for eight years.

He apologised for not revealing that the land was in his name following an investigation by Kathryn Stone, the then standards commissioner.

A Labour spokesman said at the time: “Keir was unaware the field’s value had increased above the declarable limit.

“The commissioner agreed that this was an inadvertent error, which has been rectified.”

A Downing Street spokesman said: “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.”

The spokesman 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.”

[Source: Daily Telegraph]