How Ed and David Miliband exploited a tax loophole described by Gordon Brown as “tax abuse”

MilibandbrothersEd Miliband poses as a man of the people, someone who empathises with the struggles of the poor and who would do anything to alleviate them.  Wouldn’t you think then that tax loopholes would be beneath high minded leftie Ed, and that he would die rather than deprive the state of a penny of any tax owed?  Especially since his dad Ralph, was a Marxist and don’t they believe that property is theft?

Not bloody likely!  Before the death of life long Marxist Ralph Miliband, the family arranged a deed of variation, legally exploiting a tax loophole, whereby 40% of Ralph’s valuable Primrose Hill property was transferred to his sons, who each received a 20% share. This great reduced inheritance tax when dad Ralph finally passed away.

Property developers would applaud them, but eyebrows were raised sky high in the Labour party, because this was seen as betraying the family’s deeply entrenched socialist background.  The Daily Mail reported:  “The death duty loophole was named by Gordon Brown as one of 25 “tax abuses”. The Chancellor has complained that the wealthy regard inheritance tax as “voluntary”.  There have been repeated reports that the Treasury was poised to ban such deeds of variation, but they remain an entirely legal device.”

So now we know!  Ed might pretend to have Socialist beliefs, but when push comes to shove, and it comes down to making a fast buck, as far as the Miliband brothers are concerned, it’s no contest and the state can go hang, rather than they miss out.  Like Ken Livingstone, Ed has his mouth full with criticisms of the banking sector, while himself taking advantage of tax loopholes.  At heart, Ed is a true blue capitalist, just like Tony Blair and his brother.

Update 9th Feb., 2015:  The Spectator points out that Labour has only paid £14,000 in tax last year (versus the Tories’ £187,000) on total income of £33.3m (versus the Tories’ £25.4m and the Lib Dems’ £7.3m – the Lib Dems paid just £14 tax). Read the shocking facts here!

Correction:  “Karl Marx, although initially favourable to Proudhon’s work, later criticised, among other things, the expression “property is theft” as self-refuting and unnecessarily confusing, writing that “… ‘theft’ as a forcible violation of property presupposes the existence of property…” and condemning Proudhon for entangling himself in “all sorts of fantasies, obscure even to himself, about true bourgeois property.”

31 responses to “How Ed and David Miliband exploited a tax loophole described by Gordon Brown as “tax abuse”

  1. It’s all an act, and he isn’t fooling anybody.

  2. “Property is theft” is Proudhon, rather than Marx, who was rather critical of what he calls “utopian socialism”

    Primrose Hill is nice – I would definitely be reluctant to loose a olace there!

    • Correction made, thanks!

    • PS. I don’t mind a bit if ppl point out my mistakes, because i like to learn things, feel free.

      • Proudhon has a point, in my opinion! However the whole situation has changed. We no longer live in a labour-intensive heavy industry, conscript army scenario

      • As “true socialists”, reprehensible that Ed and David Miliband use tax loopholes.

      • I’ve just read your post again, and all it is describing is what I understand as the routine way of dealing with the Death Duties situation, which will wipe out your estate

        (Your bit on Marx is very good, btw – you should apply for a job at Ponders End Mechanics Institute! lol)

        “Socialism” is a dead word these days, as far as many people are concerned – referring to what Lenin described as “mere *social* revolutionaries”

        I’m a hopeless un-reconstructable peasant, I’m afraid – there’s a lot about “the Shire” I quite like, the problem is the level of income required to live in it

  3. Gordon Brown described the loophole as “tax abuse” and members of the Labour Party did not approve. Just because a lot of people use tax loopholes doesn’t make it right. If it was, bankers wouldn’t be getting it in the neck.

    Ed Miliband should pay what tax is due, without any recourse to loopholes. I’m not saying what he did was illegal. But he is continually bashing bankers, so just like Red Ken, is wide open to charge of hypocrisy.

    • The way I’ve always understood it, is that Death Duty is swinging. The routine procedure is to make property over an agreed period of time before dying

      • Really strange that Gordon Brown describes it as tax abuse and the Labour Party accuse Ed of abandoning his deeply entrenthed socialist beliefs. Wow.

      • On re-reading I think that should be “swinge-ing” lol It might be interesting to research the history of the Death Duties, and the motivation behind the tax

        I am now thining of “family” as meaning £30,000/pa school fees!

  4. PS – not to mention £50,000/pa mess bills, by Old Barracks Yard lol

  5. Writing in the Observer he added: “While profit has become something of a dirty word, it’s important to remember that many corporations reinvest their profits in research and product development, which in turn tends to lead to job creation, further economic growth and, ultimately, more tax.

  6. A deed of variation is drawn up to change a will after death not before. It actually says that in the article you link to. If it had been done before, Ralph Miliband would have just changed his will, assuming he had one. It also wasn’t designed to reduce the inheritance tax on Ralph Miliband’s estate as he had left everything to his wife, so there wasn’t any tax to pay. It was designed to reduce the inheritance tax on Marion Miliband’s estate when she dies.

    In 2007 Gordon Brown’s Chancellor made it possible to transfer the nil rate band to a spouse, thus making this kind of deed of variation completely unnecessary for married couples. Presumably he came to the conclusion that this particular loophole wasn’t actually a tax abuse. It’s not exactly unreasonable to believe that all estates should benefit from the hmrc allowances rather than just those where inheritance tax planning occurred.

    (Nil rate band change: http://news.bbc.co.uk/1/hi/7034399.stm)

    • There was huge disapproval of what Ralph Miliband did in his own party. Nobody is saying he did anything illegal, but like Ken Livingstone, who made his reputation bashing bankers for tax avoidance, when he was discovered to be doing the same thing, people took a dim view of it and he was wide open to charges of hypocrisy. He also tried to smear Boris Johnson and make out he was doing the same thing. He wasn’t and nearly punched Ken in the face.

      Ed Miiband is being hypocitical being party to this.

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  9. how is he hypocritical when he paid substantial capital gains tax on his share?

    • There was huge disapproval in the Labour Party when Ed did this, mainly because Gordon had condemned this particular loophole as “tax abuse”.

      “Property developers would applaud them, but eyebrows were raised sky high in the Labour party, because this was seen as betraying the family’s deeply entrenched socialist background. The Daily Mail reported: “The death duty loophole was named by Gordon Brown as one of 25 “tax abuses”. The Chancellor has complained that the wealthy regard inheritance tax as “voluntary”. There have been repeated reports that the Treasury was poised to ban such deeds of variation, but they remain an entirely legal device.”

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