Lady Houston's arrangement with Winston Churchill

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DavidFrankenberg
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Lady Houston's arrangement with Winston Churchill

Post by DavidFrankenberg » 12 May 2020 19:37

Hello,

Lady Houston was from a poor family, 9th of 10 children.
A dancer she married a rich guy when she was 16. She married 3 times, each time with a wealthier man.

Then comes her 3rd marriage. This time with Lord Houston.

Reading wiki.en :
By the time of their marriage Sir Robert was an invalid who suffered from bouts of depression and believed that he was being poisoned. He died aboard his yacht SY Liberty on 14 April 1926, leaving his widow roughly £5.5 million.[4]

Lady Houston was now England's second richest woman. Although not liable to pay death duties on Houston's estate she negotiated personally with Winston Churchill, then Chancellor of the Exchequer, to pay £1.5m as an 'act of grace', as she put it.


I dont understand : she had 5.5 millions £ but she was unable to pay the taxes ???

She had to make an arrangement with Winston Churchill ?

Anybody could explain that, please ?

Thank you !

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wm
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Re: Lady Houston's arrangement with Winston Churchill

Post by wm » 12 May 2020 20:28

In civilized countries inheritance tax doesn't apply to close relatives. She didn't have to pay anything.

DavidFrankenberg
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Re: Lady Houston's arrangement with Winston Churchill

Post by DavidFrankenberg » 12 May 2020 20:31

wm wrote:
12 May 2020 20:28
In civilized countries inheritance tax doesn't apply to close relatives. She didn't have to pay anything.
I just misunderstood the wiki's text. Thank you.

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Waleed Y. Majeed
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Re: Lady Houston's arrangement with Winston Churchill

Post by Waleed Y. Majeed » 12 May 2020 21:01

So Denmark is not a civilized country...? Or the UK as we are speaking of back then. Inheriting land/estate was not as easy/cheap as wm applied above. Here‘s a little read on tax and inheritance for a “famous” location.
https://taxfoundation.org/downton-abbey ... ath-taxes/

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wm
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Re: Lady Houston's arrangement with Winston Churchill

Post by wm » 13 May 2020 09:00

Democracy is two wolves and a lamb voting on what they are going to have for lunch.

Your wolves voted to fleece their lambs of their money. Not nice, not-civilized.

Family is the basic unit of society and you treat its memebers as perfect strangers.
Usually the entire family maintains and cares for the property even if it's registered under the husband's name.

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Re: Lady Houston's arrangement with Winston Churchill

Post by reedwh52 » 13 May 2020 20:24

Lord & Lady Houston established residency in Jersey. As a resident of Jersey, the Houston estate were not subject to the inheritance tax/death duties.
At the time of Lord Houston’s death, his estate was valued at £ 8 million. This would have a £3.2.million tax liability if Lord Houston had been a resident of the UK.
(This would equate to more than $220 million in 2020 dollars.)

Due to the size of the potential tax liability, the UK government decided to challenge the tax-exempt status conferred by the Jersey residency. There was no certainty that the State would prevail in the case it was deemed valuable enough to attempt the court case.
On the Crowns side, the reward was the £3.2 million while the risk gaining nothing, This was a significant risk because of the relatively unique relationship between Jersey & the UK.
On Lady Howards side the risk was losing £3.2 million; the reward was not paying anything at all.

Lady Howard approached the Chancellor of the Exchequer directly to resolve the issue. The two of them worked out a compromise where each side got about half of what they had at risk.

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Re: Lady Houston's arrangement with Winston Churchill

Post by DavidFrankenberg » 14 May 2020 15:07

reedwh52 wrote:
13 May 2020 20:24
Lord & Lady Houston established residency in Jersey. As a resident of Jersey, the Houston estate were not subject to the inheritance tax/death duties.
At the time of Lord Houston’s death, his estate was valued at £ 8 million. This would have a £3.2.million tax liability if Lord Houston had been a resident of the UK.
(This would equate to more than $220 million in 2020 dollars.)

Due to the size of the potential tax liability, the UK government decided to challenge the tax-exempt status conferred by the Jersey residency. There was no certainty that the State would prevail in the case it was deemed valuable enough to attempt the court case.
On the Crowns side, the reward was the £3.2 million while the risk gaining nothing, This was a significant risk because of the relatively unique relationship between Jersey & the UK.
On Lady Howards side the risk was losing £3.2 million; the reward was not paying anything at all.

Lady Howard approached the Chancellor of the Exchequer directly to resolve the issue. The two of them worked out a compromise where each side got about half of what they had at risk.
So she finally paid 1.6 million £.

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