The Fortescue family, owners of the historic Boconnoc Estate in Cornwall, have won a court case to avoid a large inheritance tax bill resulting from a mistake made while attempting to secure the estate's future for the next generation.
A historic aristocratic family, the Fortescues, who own the Boconnoc Estate in Cornwall and are linked to British royalty and the abolition of slavery, have successfully fought a legal battle to avoid a substantial £1.2 million inheritance tax bill.
The dispute arose from an administrative error made by Elizabeth Fortescue while attempting to secure the estate’s future for her daughter, Clare, following the tragic death of her husband, Anthony Fortescue, in 2015. The Fortescue family acquired the Boconnoc Estate in 1717, financing the purchase with the sale of the renowned Pitt Diamond, a significant gemstone now housed in the Louvre Museum.
For over two decades, Elizabeth and Anthony dedicated themselves to a comprehensive restoration of the manor house, transforming it into a sought-after luxury wedding venue and ensuring the estate’s preservation for generations to come. Following her husband’s untimely death, Elizabeth sought to transfer her life interest in the family trusts to her daughter, aiming to minimize inheritance tax.
She acted on initial tax planning advice suggesting that releasing her interest would exempt the properties, valued at approximately £4.4 million, from inheritance tax if she lived for another seven years. However, flaws in the execution of this plan led to an unexpected 20% tax charge, threatening the financial stability of the estate. The family faced the prospect of being forced to sell parts of their ancestral home to cover the tax liability.
Oliver Conolly, Ms. Fortescue’s barrister, emphasized the genuine nature of the mistake, describing it as ‘plain vanilla tax mitigation gone wrong’ and highlighting the family’s long-standing commitment to the estate. He underscored that the estate was ‘not swimming in cash’ and that Elizabeth would never have proceeded if she had understood the consequences.
The court heard details of Anthony Fortescue’s struggles with psychotic depression, and the inquest into his death recorded an open verdict, unable to determine whether it was accidental or intentional. The High Court judge, Deputy Master Joanna Lampert, acknowledged the ‘grave and unintended tax consequence’ resulting from the error and granted permission to reverse the process. The judge recognized that while the initial advice was sound, the method used to implement it was flawed and unnecessary.
The ruling allows the family to rectify the situation and potentially avoid the £1.2 million bill, which would have necessitated the sale of estate properties. The judge stated that Elizabeth believed no inheritance tax would be payable if she survived seven years, but this proved incorrect. The case highlights the complexities of inheritance tax law and the potential for significant financial repercussions from even unintentional errors.
The Fortescue family must now take the correct steps to ensure the estate’s long-term security and legacy. The preservation of Boconnoc Estate, a site with historical connections to Charles I and Charles II, remains a priority for the family
Inheritance Tax Boconnoc Estate Fortescue Family Aristocracy High Court
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