Betfred Owner Takes Action Over Property Empire In Light Of Tax Rules

Betfred owner Fred Done has decided to move his property empire overseas, according to reports. The billionaire gambling mogul has taken swift action after a shake-up in the UK inheritance tax rules.

Previously, family-owned businesses were exempt from paying inheritance tax. However, after the Chancellor of the Exchequer, Rachel Reeves, removed the inheritance tax exemption for family-owned businesses, Done has taken matters into his own hands.

What has happened?

Although Done is best known for presiding over UK betting giant Betfred, he also runs a number of other successful businesses. This includes the Fred Done Property Trading Group, which develops and sells residential and commercial property. One of their current projects entails a 41-storey apartment-and-hotel complex in Manchester, developed by Gary Neville’s Relentless Group.

According to Companies House filings, Done’s property group moved to Jersey at the end of March. This came just a couple of weeks before the Chancellor removed the inheritance tax cap covered under the Business Property Relief (BPR) scheme which Done’s group would have likely qualified for. Now, inheritance tax will be charged on assets above £2.5 million at a rate of 20%.

It is believed that the new structure that has been brought in, which includes ultimate ownership by a trust, could save tens of millions in taxes. Despite making the switch, the company will remain a UK taxpayer, and it could still qualify for some inheritance tax in the UK.

Railing against change

In the Sunday Times Rich List published in February, the Done family paid £400m in tax, making them Britain’s biggest tax contributor. However, Done has been outspoken on the subject of tax in the past, and in the run-up to the November budget, he was critical about the government’s proposed hike in gambling taxes, proclaiming it the “biggest threat he’s known in the industry”.

At the time, Betfred were previously exploring the idea of pulling all 1,287 betting shops from UK high streets. As it transpired, the general betting duty paid on online sports betting will rise from 15% to 25% in April next year, while there has already been a substantial increase in Remote Gambling Duty (RGD) paid on online casino bets from 21% to 40%, forcing some operators to pivot.

Hurting high-net-worth families

The Done family are thought to be worth around £3 billion. However, the move to Jersey could spark an exodus due to the measures enforced by the Labour Party. This was voiced by Christopher Groves, a partner at law firm Withers, who explained why UK businesses are looking to uproot.

He said:

“The reason why we don’t have billion-pound unicorns [privately owned start-ups with a valuation of more than $1bn]... is because their business can’t stand them dying under the new rules.

“We’ve got clients who are in a position where the [tax charge] is so large, it’s uninsurable, the consequences of the businesses are so significant that they can’t afford to stay in the UK.”

New direction

Original government estimates suggested that the change in inheritance tax relief would raise as much as £520m by 2029/30, but this figure was later revised and brought down to £320m.

While the new measures may be deemed punitive, others might be swayed by the steps that Done has taken. Betting.co.uk reached out to Done’s representatives for further comment, but they declined to do so.