by Ali Carter
Diana continued to nod as I shuddered inwardly at the thought of such high rates of tax.
‘Lord Greengrass’s ISA fund follows the same instruction as his pension, left to his spouse, inheritance-tax free. To limit the inheritance liability I suggested Lord Greengrass left both these tax-sheltered investment vehicles to you.’
Diana said pointedly, ‘My husband honoured me as his wife, and I always knew he would have made sure I was well cared for in the event of his dying.’ She clearly felt a bit put out.
The combined value of the pension and ISA, shown in the document on top of the pile of papers between Diana and me, I could see was a substantial amount of money to live off.
As a non-member of the family and non-beneficiary, I felt increasingly uncomfortable being at this meeting, finding it utterly extraordinary that these private matters were so exposed to me when I was neither an executor nor a trustee. The only explanation I could think of is that, in some tragic way, I was filling the void of Diana’s deceased and much-missed daughter.
The meeting moved on to ‘Dispositions’.
Martin looked towards Arthur, and then looked at the paper before him as he said, ‘Your father’s situation is not particularly straightforward. As you will have been aware, Beckenstale Manor was gifted to you during your father’s lifetime. Aside from the house, the Manor comprises four workers’ cottages, two gatehouses, several farm buildings as well as any additional structures for the housing of livestock and/or poultry; there are 1,410 acres of woods and 500 acres of parkland together with the lake, the gardens, greenhouses and follies. The gift when made was a “PET”. However, because your father died within three years of the transfer, the full value of the Manor is included in his estate for inheritance tax purposes.’
Martin looked towards Arthur but only Asquintha returned his eye contact.
‘Are you familiar with PETs and the seven-year rule?’ Martin asked her.
Arthur turned to Asquintha who answered ‘No.’
Diana took an exaggerated breath.
I looked closely at Asquintha, quite admiring her apparent total disregard of Diana’s pointed behaviour.
‘A lifetime gift is known as a “Potentially Exempt Transfer” because the donor has to live seven years without occupying or retaining any enjoyment of the property (unless he pays a full market rent for its use) in order for it to qualify as a gift on which no inheritance tax is payable,’ Martin explained. ‘In this case, Arthur, your father gifted his property to you on the fifth of September two years ago. But because your father, the donor, has died within three years of the gifting, the PET has failed. As a consequence the whole property will fall into the taxable estate and its value is aggregated with his other assets for inheritance tax purposes.’
Asquintha looked crestfallen. Both Diana and Arthur knew about PETs obviously, and they looked more calmly at the bits of paper in front of them.
It was all rather fascinating to me. I don’t come from an aristocratic family or a family with assets, whether that be stocks and shares or multiple properties.
However, in the not too distant past, the Mahls enjoyed a brief spurt of fortune. Three generations ago my family made a lot of money by producing a savoury spread. They created a sensational anchovy paste to go on toast or crumpets at afternoon tea and quickly followed it up with a salmon variation. The money from these popular pastes enabled two generations of us Mahls to live in large houses with an array of servants.
As is the case still, people with money enjoy spending time with people who have money. Invitations flooded in, and my ancestors hopped from estate to estate, shooting in the winter, tennis and croquet in the summer, fishing in the autumn, while spring was usually spent in the Alps skiing in one resort or another. Despite the fact that our money was made in trade, a frowned-upon source by the highest classes, we had the lifestyle to match theirs and the money to boot.
It wasn’t long of course before drink, reckless investment and a futile attempt to branch out in America stripped us of our cash and soon after, our privileged circumstances and thus had us dropped from a very high height.
My father, the great grandson of the successful condimenteur, was close enough generationally to have had, in his infant years, friends with large country seats. So when aged eight I succeeded in a fully-funded scholarship into private education, acquaintances could be re-established and we were accepted back to the rich people’s network. Now, the fact that I can talk about public schools, drop legitimate double-barrelled names into conversation and know not to write comments in a visitors’ book, means my chances are improved of weekend invitations to beautiful country estates.
To be fair I have many genuinely kind, nice and loyal posh friends from school. Of course they are easily ridiculed, but I do enjoy their company and would hate to seem bitter or ungrateful, even when very occasionally I am made to feel just for a moment something like a poor relation.
I collected my thoughts to find Martin still talking. ‘We will discuss the inheritance tax calculation towards the end of this meeting but for now I must talk you through the most profitable transaction from the land in the last twenty years.’ Martin flicked his tongue between his forefinger and thumb and, turning over the piece of paper in front of him, he continued, ‘Taking into account capital gains tax on any profits made brings to the top of the list the sale of ten acres on the far western boundary of Beckenstale estate to a property development company eighteen years ago.’
Diana abruptly interrupted at this point to say, ‘Yes, yes, my husband included us in his successful sale that brought in a million pounds, and so there’s no need to go in to detail about the ghastly affordable housing we enabled.’
I knew the development they were discussing. It was three miles away from the Manor and there was 1,410 acres of forestry lying between it and the manor house, and so I didn’t have a huge amount of sympathy. In fact, it does annoy me when grand people bang on about how idyllic where they live is and are reluctant to sell a tiny corner of their vast amount of land to allow other people the opportunity to live somewhere beautiful too. Actually, I thought Alexander had been clever to make a good financial return at the same time as helping provide homes to those in need.
At this point Martin paid undue attention to his biro, pushing it in and out of the table again. Then he looked straight at Diana, ‘I’m afraid I must go in to detail about this sale as it brought in a much larger sum of money than you have suggested. This sum was split in half, and part went in to the estate account, a quarter of which was spent on wood regeneration and the remainder into the Greengrass charitable trust.’
‘Oh,’ was all Diana said, clearly out of her depth, and without the knowledge to protest.
‘Moving on then to the charitable trust. This is its own legal entity, governed by trust documents, which you both have a copy of in front of you. Lord Greengrass was the sole trustee and under his will he appointed you Arthur to be the sole trustee in his place.’
Martin clarified the position regarding the charitable trust, pointing out that it was unusual for a trust to only have one trustee, and he recommended that Arthur appoint two, ensuring no disagreements with the tax office.
After detailing the terms of the charitable trust Martin highlighted the largest donation to date, a considerable annuity to a Cambridge college. This seemed to come as a surprise to Diana as her head tilted sharply to one side.
I thought there probably was a good reason why Alexander hadn’t appointed any trustees, but I couldn’t prevent a small shiver of suspicion.
Martin told Arthur, ‘My advice to you as beneficiary is to direct donations from Beckenstale Estate income into the charitable trust, therefore qualifying for an income tax deduction on the gift.’
‘Yes, I see,’ said Arthur who seemed to grasp exactly what Martin was getting at.
‘If you retain the current annuities then there is no need to draw up fresh paperwork and we can proceed to other matte
rs,’ Martin continued.
Diana’s high-pitched, little cough interrupted Martin at this point as a clear sign of interjection.
But then she noticed that we were about to move to a section with the heading ‘Lady Greengrass’s inheritance’ and an awkward moment was averted.
Martin was looking down the table at Diana. ‘As you are the wife of the late Lord Greengrass, you are what’s referred to as an exempt beneficiary and therefore there is no inheritance tax due on anything he left you in his will.’
Interestingly, among such inanimate objects, as car and loose change was ‘Susie Mahl’s portrait of Harriet’. This amused me.
‘It is worth mentioning,’ said Martin, ‘that all jewellery, described in detail on pages 53 to 59’ – thank goodness, I couldn’t help thinking as this meeting had gone on for a very long time, we were nearly at the end as appendices began on page 66 – ‘has been left to you, Arthur. This has been the tradition in the Greengrass family over several generations with the unspoken understanding that it will pass together with the family title down the male line and therefore remain within the family.’
The annotated list of pearls, precious and semi precious stones, rings, necklaces, bracelets and brooches was endless, with each item described in elaborate detail. Lucky, lucky daughters if any are on the way.
‘Martin, are you absolutely certain my husband stated that all these pieces of jewellery were to be passed on at his death rather than mine?’ squeaked Diana.
‘Yes, that is correct. On effect of your husband’s death every piece of jewellery is directly inherited by his eldest son.’
I didn’t dare look towards Asquintha. But Diana took out her handkerchief and flapped it around to distract us from her lack of generosity.
But Martin continued. ‘You will need to forward me bank statements, utility bills and other outstanding bills to date, Lady Greengrass. And Arthur, your next step will be to change all bills and servants’ payroll into your name to become effective as of the 27th November.’
Arthur nodded.
‘Now I will talk you through the distribution of the estate’s assets,’ Martin went on. ‘It’s simple, and is now wholly and solely in your name, Arthur.’
Arthur mumbled something in Asquintha’s ear. It made her smile and she squeezed his hand in return. Diana noticed and tapped the table, thus giving Martin a cue to continue.
Martin leafed through the last few pieces of paper in front of him. ‘As the executor of the late Lord Greengrass’s will I am responsible for paying the inheritance tax on his estate.’
He explained the fundaments, and then he scribbled a few figures down in the margin of his note pad. ‘Totting this all up I’ve come up with an approximate figure based on my provisional estimated valuation of the estate. This figure is included in the footnote.’
It was a staggering sum. I looked at Asquintha whose face had gone ashen, so much so it reflected brightly back at her as she stared down onto the mahogany table.
Diana seemed completely unfazed by the amount of inheritance tax owed. She was after all, aristocratic in her own right and therefore probably accustomed to sums soaring into millions. Arthur’s eyes remained fixed on Martin, calmly acknowledging what he was saying.
At a mention of the gift of residue, Diana looked worried, and so Martin explained to her the Acceptance in Lieu scheme to clear the inheritance tax. ‘On inheritance of the title every Greengrass Earl throughout history has bought a contemporary work of art. It remains in the family for a subsequent generation in the hopes it will increase in value enough to cover the inheritance tax bill on the estate when his first born grandson, assuming he lived long enough to inherit the family title, dies.’
‘Did Alexander buy something?’ questioned Diana. ‘He never had an eye for art, we all know that.’
‘It’s not about having taste, Ma, it’s about having the money to afford to buy it,’ said Arthur.
‘And where might this picture be?’ Diana queried.
Martin, for the first time all morning, was silent.
‘In the attic,’ Arthur supplied. ‘It’s wrapped in the packaging it came in. We wouldn’t want it on our wall, it’s one big black canvas with a flick of what looks like Tipp-ex in the top right hand corner but it’s worth a vast sum of money already,’ he told his mother.
Martin wrapped up the final detail with, ‘Your late husband’s grandfather’s American Expressionist painting will be submitted to the Arts Council England, who will assess the open-market value of the item and pass this to the minister who will then make the final decision whether to accept it or not. The Greengrass family throughout history have had a sharp eye for buying paintings before they become fashionable. With this reputation I am confident that the current gift of residue will be accepted into a national museum in lieu of inheritance tax.’
And then the meeting was more or less over, aside from a little further detail on what was going to happen, and Diana and Arthur signing some forms.
At last Diana turned in her chair and looked up at me. ‘Susie, will you join me for lunch?’
‘That would be lovely,’ I replied.
‘On your way out,’ she dismissed me, ‘would you be kind enough to let Mary know we will be ready to eat in the conservatory in ten minutes. Just the two of us.’
‘Of course.’ I stopped in the doorway to thank Martin for allowing me to be present.
‘Goodbye Miss Mahl,’ he replied without letting on whether he’d found my presence an imposition or a comfort to the family.
Grand houses almost always have a daily timetable and a similar one at that. Abiding to formality, and making no allowances for casual behaviour. Plans are made well in advance and usually by written invitation: ‘I know the summer has hardly begun, but Humphrey and I so hope you will be able to shoot with us on the 15th of December. Usual form: arrive Friday evening in time for dinner, shoot all day Saturday, depart on Sunday after luncheon. With love, Priscilla.’
And days with no formal plans follow a set routine: breakfast at 8am, coffee at 11am, lunch at 1pm, afternoon tea at 4pm, cocktails at 7.30pm and dinner at 8.15pm. Gin and tonics will be available at the drinks cabinet in the drawing room from 6pm onwards.
But now it was clear that under the dreadful circumstances of death, this daily routine goes awry.
Mary told me that Diana’s lack of appetite had led to wasted food and her post-lunch nap yesterday continued for several hours, regardless of the fact that afternoon tea was prepared and waiting. Under the circumstances this was fair enough of course, but I did think that someone really should have requested the kitchen to hold back on food production.
Mary was delighted therefore when I asked for lunch in the conservatory in ten minutes. ‘Oh Madam,’ she confided. ‘I’ve been in a fluster about where and if Lady Greengrass would like it. I have laid up the dining room, the conservatory, and that tray there,’ she pointed at the table, ‘as I wanted to cover all bases.’
‘Thank you, Mary,’ was all I said. It was not my place to start changing the routine, although I longed to for the benefit of the servants.
Lunch was hot minestrone soup, but the conservatory was decidedly chilly, and there was a dreadful racket of the rain falling on the glass roof. The watery, blurred view, out the windows almost convinced me I was crying.
But nothing, it seemed, was going to distract Diana, who furiously stirred her soup back and forth round her bowl with an enormous silver spoon, venting her frustration as regards Arthur’s marriage outside his class.
‘All those explanations, Susie, of laws and conventions, they took up such a lot of Martin’s time. I found the whole thing frightfully embarrassing,’ she muttered. Then she referred to Asquintha, although without mention of her name. ‘She really should go and look it up in a book and learn it, rather than shame us all in front of our family solicitor.’
Diana was being irrationally critical of her daughter-in-law, who, as far as I could tell, w
as behaving (clothing aside) demurely and as one should within a mourning household. Thankfully after one final stab, with a ‘Countess Greengrass! Who’d have thought a middle-class girl from Kent would ever be in for a chance of marrying an Earl’ the conversation took a more interesting turn.
‘Henry Dunstan-Sherbet, Susie.’
She said it as if I knew him well. Maybe she thought I did.
‘It’s a different matter when women marry into the lower classes. You can see it with his mother, Princess Violet in her own right, don’t you think? We used to know her but then we lost touch. Partly because their house isn’t big enough for weekend parties and partly because quite frankly Graham is just not, you know, our type.’
‘Ben Codrington and Henry are old friends,’ I said grasping hold of what I did know.
‘It was all Violet’s money that sent Henry to that school. Graham didn’t have a penny and Violet married him for love. Not that I’m saying you shouldn’t marry for love, but money is far more useful. As for that surname, how embarrassing to invent your own double-barrel.’
‘I didn’t know that was the case.’
‘Oh yes. You can tell by the awful nouveau hyphen; Dunstan-Sherbet is a combination of Graham’s mother’s and father’s surnames. I don’t think Violet would have eloped with him if she was to be plain old Mrs Sherbet.’
I didn’t agree but knew it wasn’t up for discussion. Instead I was happy (and hopeful!) with the thought that you could get married for love alone.
‘Henry’s their only child. And it turned out to be an unhappy union.’ Crash! Diana had instantly shattered my illusions. ‘I can be sure that if Violet hadn’t come from Catholic aristocracy she and Graham would have gone their separate ways years ago. People in his circle do get divorced, you know, Susie.’
Poor Henry. The misery of being an only child in an unhappy home.
‘He is handsome, with that twinkle in his eye reminding me of Alexander. But don’t let it tempt you, Susie. He’s not good enough for you.’
‘He’s not my type anyway.’ I wasn’t entirely convinced by my own words but I wanted to make it clear to Diana that Henry and I were not an item.