Multi millionaire parent says 'let children fend for themselves' in unusual trust dispute case

An unusual case has been lodged at the High Court Chancery Division this week by the children of multi millionaire businessman, Manny Davidson. The children, Gerald, 54, and Maxine, 56, are attempting to change the structure of their trust fund and exclude their parents from the right to appoint new trustees. The fund was set up many years ago to mitigate Inheritance Tax on the couple’s estate and is now worth a reported £600 million. In addition, Mr Davidson and his wife gifted their substantial family home, Lyegrove House, into their children’s name. The property, worth approximately £12 million, has been put on the market by the children as part of the family feud and Mr Davidson and his wife are now excluded from visiting it.

Mr Davidson warned “People should not worry about inheritance tax. Keep your money and spend it on what you want. When you die, the children will pay 40 per cent tax but they will still have the other 60 per cent.”

Whilst this case, given the sums involved, will seem far removed from most of our personal circumstances, Mr Davidson does make an interesting point about how far you should go in restructuring your estate during your lifetime to mitigate tax consequences that will only occur on your death. Increasingly, with the government’s  recently announced change to the inheritance tax threshold for the family home to £1 million, many of us will be excluded from having to consider how inheritance tax might affect our estates. However, trusts are set up for various reasons, not all relating to tax, and this case also highlights the importance of choosing the right trustees to manage settled funds and the value of sound advice when things go wrong.