Our ownership and payment of tax

I feel very strongly about the moral duty of all individuals and businesses to pay their fair share of tax and abide by the rule of law that determines it. So does the Duke of Westminster and the Grosvenor family.

Grosvenor is an international organisation which represents the Grosvenor family and whose purpose is to deliver lasting commercial, social and environmental benefit.

Our activities include developing, managing, and investing in international urban property across many of the world’s leading cities. In the Food & AgTech sector our growing investment portfolio includes some of the industry’s most innovative businesses. We manage rural estates and their environmentally sensitive habitats, while supporting charitable initiatives targeted at vulnerable young people.

Our size and value:

Speculation has often sought to put an overall value on the Grosvenor organisation, with estimates varying wildly. We believe in the importance of transparency and accountability which is why for over 20 years we have published through Annual Reviews and Financial Statements comprehensive details about Grosvenor Property (formerly referred to as Grosvenor Group) – by far the largest part of the organisation whose property management, development and investment activities span from Mayfair and Belgravia in London to some of the world’s leading cities including Vancouver, San Francisco, Madrid, Tokyo and Hong Kong. Grosvenor Property’s net assets were valued at £6.7bn at 31 December 2020.

Our other principal commercial enterprise, Grosvenor Food & AgTech (formerly known as Wheatsheaf Group), was created in 2012 and continues in its growth trajectory by investing in food and AgTech businesses around the world. As part of the business’ statutory financial statements, its net assets were reported at £294.5m at 31 December 2020. 

It is now our plan for our next Annual Review (planned for Spring 2022) to expand its remit beyond our property activities and also report on Grosvenor Food & AgTech – as well as other smaller commercial and public interest activities managed by the Grosvenor organisation. 

Grosvenor’s ownership structure:

Grosvenor’s commercial business assets are owned by a series of UK resident (i.e. onshore) trusts, the beneficiaries of which are both current members of the Grosvenor family and future, as yet unborn, descendants. 

The reason that Grosvenor, like many other family-owned enterprises, holds assets via trusts is to ensure continuity of the collective ownership, administration and management of the estate across the generations. 

This enables a far-sighted approach to be taken, ensuring a lasting commercial, social and environmental benefit is delivered from our activities. We are not driven by short-term considerations, and this affords us a perspective that we believe to be in the interests of the Grosvenor family, our employees and the communities of which we are part.

Tax paid by the Trusts:

The UK resident trusts are liable to pay income tax, capital gains tax and inheritance tax (IHT). Instead of a payment of 40% inheritance tax upon death, the majority of the trusts are of a type that pay a rate of 6% every 10 years. This means that over a full lifetime, the trusts will pay this tax many times over, with the added advantage to the UK taxpayer of its regular, effectively in-advance payment schedule. The remaining trusts will be subject to 40% IHT on the death of the specific beneficiary.

As Grosvenor family members are all UK resident – as their predecessors have been so for nearly 1,000 years - they pay UK taxes in the same way as the rest of the UK population, while being entitled to the same exemptions. By way of example the personal assets left by the 6th Duke to his widow upon his death in 2016 were exempt from inheritance tax – exactly in the same way as they would have applied to any other UK married couple. On her death, inheritance tax will be due in the usual manner.

In addition to the main UK-based trusts there are two small non-UK resident trusts which were established over 50 years ago to acquire some non-UK assets. These trusts hold less than 1% of the value Grosvenor’s assets but are not connected to the business activities of the organisation. No family member has received any benefit derived from these but, as UK residents, if they ever did then the value of the benefit received would be subject to tax in the UK. These trusts are also subject to the 10-yearly inheritance tax charge.

Tax related to our commercial activities:

Within the property business (Grosvenor Property), property income and gains are taxed in accordance with the rules of the country where the property is located. 

We occasionally invest in ventures with other investors which are established in jurisdictions that do not create an additional layer of tax, in order to prevent the investors being subject to double taxation. Otherwise, we are careful to ensure that our ownership of overseas property is through vehicles incorporated in the same country as the asset, consistent with our tax policy. The same approach is taken by Grosvenor Food & AgTech. 

Financial investments that are part of our Financial Investments Portfolio are committed to funds managed by third parties. These are commonly incorporated offshore, again largely to prevent the issue of double taxation. All investment returns are reported and taxed as appropriate and in accordance with relevant UK tax rules.

Mark Preston
Executive Trustee, Grosvenor 

Group 2