The Duke of Westminster principle is no longer sacrosanct, Peter Stevens explains.
When Hugh Grosvenor 2nd Duke of Westminster tried in the 1930s to reduce his surtax bill by paying his staff under seven-year deeds of covenant expressed to be in recognition of past services on the understanding that they would not claim additional remuneration for future work the House of Lords decided that this worked. In his famous enunciation of what came to be known as the ‘Duke of Westminster principle’) Lord Tomlin confirmed that:
‘Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result then ...
