Labour confession: How Keir Starmer admitted Ed Miliband ‘intended’ inheritance tax dodge

Last week, Sir Keir appointed former Labour leader Ed Miliband to his new Shadow Cabinet. Mr Miliband, who led the party between 2010 and 2015, will now hold the role of Shadow Business Secretary. Sir Keir won the leadership contest on April 5, after beating Rebecca Long-Bailey and Lisa Nandy, replacing the outgoing Jeremy Corbyn.

He named Ms Nandy as his Shadow Foreign Secretary and appointed Ms Long-Bailey as Shadow Education Secretary.

The newly announced Cabinet is majority female, with seven BAME MPs included.

The appointments of Mr Miliband and Lord Falconer to the Shadow Cabinet signal the ascent of the soft left in the party, at the expense of the mr Corbyn-supporting hard left who have dominated since 2015.

As many Labour supporters wonder whether Sir Keir will be able to restore the party’s electability after December’s general election, unearthed reports reveal how the former barrister confirmed Mr Miliband’s inheritance tax dodge five years ago.

In 2015, Mr Miliband became embroiled in a row over his inheritance, because he, his mother and his brother – the former Labour MP David Miliband – agreed to change the will of his father, the Marxist Ralph Miliband, in 1994.

The row centred on a house in Primrose Hill, where the Miliband family grew up.

When he died in 1994, Ralph Miliband originally left the house to his wife, Marion.

However, along with his mother and his brother, Mr Miliband agreed to rewrite his father’s will using a deed of variation. 

Instead of the family home passing to his mother, each brother was given 20 percent of the asset.

In order to change a will in this way, all the people involved have to agree.

The deed of variation would ultimately reduce the tax on Mrs Miliband’s estate, as inheritance tax would only be paid on 60 percent of the asset rather than the whole value of the home.

According to a 2015 report by The Telegraph, in 2004, David Miliband paid £800,000 for the whole house.

A similar house on the same street sold for over £3million in 2015.

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The report reads: “Ed Miliband said he paid capital gains tax when his brother bought him out. If the two brothers inherited the whole house now, they would have to pay 40 percent inheritance tax, which would be around £1.2million.”

The then-Labour candidate and former DPP Keir Starmer admitted that Mr Miliband’s financial arrangements were “intended to reduce tax”, raising questions about the Labour leader’s decision to attack tax “avoiders”.

Mr Starmer, who was the director of public prosecutions until 2013, said that people were more interested in “complicated, sophisticated tax avoidance schemes,” than Mr Miliband’s arrangements.

At the time, he told BBC Radio 4’s Today programme: “People will take different views on deeds of variation and all forms of tax relief is in one sense intended to reduce tax.”

The row erupted after Mr Miliband accused ex-Conservative leader David Cameron of being a “dodgy Prime Minister surrounded by dodgy donors”.

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He then named the former Conservative treasurer Lord Fink as someone who avoided tax.

Lord Fink insisted he paid the correct amount of tax.

Brexit Party leader Nigel Farage joined the debate, saying that Mr Miliband would “regret” raising the issue.

He told LBC five years ago: “Very wealthy people, and particularly those that have businesses and houses and perhaps families around the world do legally use what’s available to them to avoid paying tax.

“Some of that is straightforward. Some of it in the case of one or two well-known celebrities looked to be highly immoral. So I think Ed Miliband, in getting onto this turf, I think this debate is a race to the bottom… I think the use of the word dodgy, Ed will come to regret.”

Mr Miliband rejected claims he was involved in tax avoidance.

He said: “This is a question directed at me personally, and something that my mother did 20 years ago, a decision she made.

“Let me just say this; I paid tax as a result of that transaction. I’ve avoided no tax. No doubt the Conservative Party wants to smear mud today. But, frankly, it’s not going to work.

“The story has been written before. And I’ve paid tax on that money.”

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