Lord Ashcroft avoids paying full tax bill

This past week has seen the coalition government pledge £900million to clamp down on tax avoidance and evasion, with Chief Treasury secretary Danny Alexander saying 'Tax dodgers are as bad as benefit cheats'. His high profile assault on those who treat tax as an "optional extra" was still ringing in the ears of the UK when it was announced that controversial figure Lord Ashcroft managed to avoid millions of pounds of tax despite promising to become a full UK taxpayer as a prerequisite to taking up his seat in the House of Lords.

The Conservative peer avoided payment of approximately £3.4million inheritance tax when he transferred his £17million stake in his main UK company, the Impellam Group, to a trust for the benefit of his children on 5th April, one day before the introduction of a new law requiring people sitting in the House of Lords to pay tax on worldwide income and assets. Had the transfer been done one day later he would have had to pay 20% tax on the interest transferred.

Lord Ashcroft had previously said in a statement that he agreed with the new tax rules for the House of Lords and on a television interview on election night he announced that he was becoming a full UK taxpayer. However, he never became a permanent resident of the UK and instead agreed to become a long term resident only, which means he did not have to pay tax on income from abroad.

While he has not broken in rules by transferring his interest to a family trust, the move has been widely condemned as conflicting with the coalition government's new tough stance on tax avoidance.

If you live in Northern Ireland and require legal advice in respect of inheritance tax, income tax, capital gains tax, or any other matter, contact Wilson Nesbitt solicitors for specialist quality advice by emailing [email protected] .

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