Camberwell and Peckham | Harry the Hypocrite

3 05 2010

Before I start, I’m all for stashing away as much untaxble disposable income from the prying eyes of Government for the simplest of reasons, I already pay £2,000 too much!  But alas, I’m not a lying cheating scumbag of a face trying to be reelected in Camberwell and Peckham.

‘Hypocrite’ Harman and her family’s inheritance tax dodge on £750,000 estate

By James Chapman and Colin Fernandez, Daily Mail.  Last updated at 1:46 PM on 3rd May 2010

Harriet Harman was accused of ‘hypocrisy’ yesterday for attacking Tory plans to cut inheritance tax although her own family exploited loopholes to shelter their fortune from the levy.

The Labour deputy leader was revealed to be one of the beneficiaries of a trust set up in her father’s will designed to reduce the amount of tax she would eventually pay on his estate.

Miss Harman has repeatedly railed against the Tory proposal to raise the inheritance threshold substantially, describing it as a ‘tax cut for the wealthiest estates’.

But documents show how her father attempted to use complex tax avoidance loopholes to protect some of his fortune from the Inland Revenue.

Harriet Harman’s family have exploited loopholes to shelter their fortune from the tax levy

John Bishop Harman, a surgeon who died in 1994, set up a trust designed to minimise the amount his children would pay in tax on his £750,000 estate.

He created a ‘nil-rate-band discretionary trust’, a structure used by wealthy families at that time.

It allows one spouse to transfer assets up to the value of the inheritance tax threshold to a trust when he or she dies, and name the chosen heirs as beneficiaries.

The remaining estate passed on to the surviving spouse is correspondingly smaller, limiting the tax liability to the children on their death and effectively doubling the inheritance tax threshold.

One expert said the family would have had to go ‘out of their way’ to draw up the then little-known arrangement.

The Conservatives claimed it undermined Miss Harman’s ‘class war’ attacks on their proposals to lift the inheritance tax burden.

Tory chairman Eric Pickles said: ‘Harriet Harman’s hypocrisy is breathtaking. You need to judge Labour not on what they say, but on what they do.’

Tax experts said that the rules changed in 2007, since when couples have been allowed to transfer their inheritance tax allowances  –  making trusts of the kind Mr Harman set up redundant.

Miss Harman’s mother Anna is still alive, aged 91, and would now be able to use her late husband’s tax allowance when making a will even if he had not set up the trust.

But had the inheritance been passed on before 2007, Miss Harman and her siblings would have benefited by thousands of pounds.

Mark Spragg, an expert in probate at Keystone Law, said of the trust scheme: ‘Not everybody would have known about it at the time. It wasn’t widely publicised by the Revenue.

This was something people thought up as a good idea. It was an avoidance scheme when it came out  –  it was obviously a bit of a tactic.’

John Bishop Harman was a member of the Royal College of Surgeons who lived and practised on Harley Street. His sister was married to the celebrated aristocrat, the Earl of Longford.

He died in May 1994 and left his estate to Anna, an heiress to a paper manufacturing firm, and his four children as beneficiaries of the trust fund. The children stand to benefit when their mother dies.

The house where Miss Harman grew up, 108 Harley Street, was sold in 1990, for an undisclosed amount. Similar properties sell today for upwards of £15million.

Dr Harman’s will shows he left £758,472 to his wife  –  which would have been the value of stocks, shares, and cash rather than any properties owned by the couple.

Miss Harman, who is tipped as a potential ‘caretaker’ leader for Labour if Gordon Brown quits after a defeat in Thursday’s general election, has attacked Tory plans for inheritance tax several times.

Under the current system, when someone dies the estate is liable for inheritance tax if the value is more than £325,000.

That £325,000 is now transferable between couples, even if they die in different years, so in practice a husband and wife would actually have a combined threshold of £650,000.

The Tories have pledged to increase this to £1million, or £2million if transferred between couples.

A spokesman for Labour’s deputy leader said: ‘Miss Harman’s father’s will was a matter for him. Her mother is still alive and her financial arrangements are private.’

A source close to Miss Harman said she had not benefited from any income drawn from the trust.

Once more, it isn’t that her father used a little-known and unpublicized legal loop-hole, it is the fact that here is a woman who screams communistic rhetoric of ‘eating the rich’ while blatantly protecting hers.  Doncha just love the Law Society are always able to find a loop-hole for the Masters but for us mere consumers, it is always by the book.

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