Margaret Thatcher

The children of former UK prime minister Margaret Thatcher will avoid paying millions in inheritance tax because their mother’s house in Belgravia, London, is registered to an offshore trust.

Thatcher, who died in April, left £4.7 million to her family in her will, with a third each going to her children Mark and Carol, and the remaining third to be shared between her grandchildren when they reach 25.

Not mentioned in the document is the house in Chester Square, recently valued at £12.5 million by Zoopla, which Thatcher lived in for the last decades of her life, reports The Mirror

Under UK law, those who inherited the property to would have had to pay inheritance tax of 40% of its value, or up to £5 million, if it were registered as belonging to a UK resident.

The house was bought in 1991 by Bakeland Property Ltd, which was then based in Jersey, and then sub-leased to a firm of the same name registered in the British Virgin Isles, another offshore tax haven.

John Christensen, of the Tax Justice Network, said: “There are huge financial benefits for an offshore company to own a property or leasehold, particularly in connection with stamp duty and inheritance tax.

“A company doesn’t die. If a person dies the property has to be passed on to someone else – obviously this is not the case with a company.

“This can be very beneficial indeed and can save a large amount of money in taxes which would be othewise due.”

In 2002, the Guardian reported that the company’s shares were held by Hugh Thurston and Leonard Day, Thatcher’s friends and financial advisers.

Accountants said that they were acting as nominees for a trust with concealed beneficiaries.

One of Thatcher’s first acts on becoming prime minister in 1979 was to erase government restrictions on the amount of money that could be moved abroad, leading to the growth of offshore tax havens.

“It has always been strange that Margaret Thatcher, that most British of PMs, enjoyed the benefits of a property registered in the BVI. It is possible that Denis Thatcher set up the trust or other offshore arrangements in order to save tax,” Richard Murphy of Tax Research UK told the Mirror.