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Trust Issues


Controlling Your Wealth From Beyond The GraveHere’s a story from the past:Back in 1936, Shapoorji Pallonji Mistry (grandfather of Cyrus Mistry) acquired around 12.5% of Tata Sons after the death of FE Dinshaw, from his estate. Dinshaw had been a frequent financier for the Tatas and had converted debt to equity to get his shares in Tata Sons. He wanted his shares to go into a trust after his death, but somehow Shapoorji Mistry prevailed upon his managers.And then in a master-stroke Shapoorji acquired another 6% from JRD Tata’s brother Darab, who sold, it is said, to spite his elder sibling, who was hogging the limelight at the Tatas. But Shapoorji’s adventure had to stop there, as the sons of JN Tata Ratanji and Dorabji had already arranged their own holdings, adding up to 80%, into charitable trusts before their deaths. ( JRD and Darab were descendents of Dadabhoy Tata, a partner and cousin of JN Tata’s father Nusserwanji Tata.)

The Tata Trusts are probably the most well known in India.Using trusts, either charitable ones like these or private ones with private beneficiaries, was popular in India till the ’80s to bequeath assets to progeny. Between the 80s and the ’90s, private trusts went through a period of highest taxation and lost their popularity. Today, they seem to be the flavour of the season again. Along with popularity have come services that set up trusts and help manage them. Apart from the tax pressure on trusts being eased in early 2000, some high-profile inheritance drama helped. Read more of this post

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The History Of Inheritance Tax in India


wealthymatters,com

With rising fiscal deficit, fiscal consolidation is suddenly front page news. The government hasn’t done well in its attempts to raise revenues both tax and  non tax.The sense of alarm has brought back discredited ideas centre-stage.One of these ideas is a tax on inheritance,a favourite hobby horse of the Leftists.No matter that it was overextending ourselves on repackaged Garibi Hatao welfare measures with a proven record of ineffectiveness that brought us to the fiscal mess in the first place.Inheritance tax is being touted in the UK,US,Germany,Italy etc as a measure to claw their way out of recession.Small wonder that there is a clamour by the intellectually bankrupt for its reintroduction in India. Read more of this post

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