‘I'm insuring my life for £6m to protect my family from Reeves's inheritance tax raid'

Yahoo

17-02-2025

A British hotel tycoon is buying a £6m life insurance policy to protect his fortune from Rachel Reeves's inheritance tax raid.
Steve Perez, who owns a string of upmarket restaurants and hotels in the East Midlands, as well as the drinks company Global Brands, said he is taking the steps to ensure his family is not forced to sell parts of his business empire if he dies.
It comes after the Chancellor unveiled a string of changes to inheritance tax rules during her maiden Budget, including slashing relief for business assets.
Mr Perez said: 'I'm 68, and come April next year, my business potentially will have a huge, huge tax bill.
He added that in order to keep the business going 'not necessarily for [his] heirs' benefit but for the employees' benefit and to protect the business', he is taking out a life insurance policy costing him about £6m.
He added: 'I built this business up from the back of a van and we now employ 400 people in Derbyshire. I suspect if the business had to be sold, it would go to a foreign corporation, or it would go to a private equity type of business which wouldn't care about the local area and employees as I do.
'Instead of investing the money back into the business, I'm having to take money out of the business to pay the life insurance policy, just in case I die while these laws are in place.'
Mr Perez founded the drinks company Global Brands in 1997 after creating the vodka cocktail drink VK.
He later expanded into hospitality, building the Casa Hotel and buying the Peak Edge Hotel, both in Chesterfield. In his spare time, he is a competitive rally driver.
He is among many British business owners grappling with changes to inheritance tax laws.
Under previous rules, properties used for business purposes could be passed down without incurring inheritance tax. From next April, however, properties with a value of more than £1m will pay a 20pc rate.
Bosses have argued that the changes discourage investment, warning that many family-owned businesses be forced to sell up if they cannot pay the levy.
Farmers in particular have been incensed by the Chancellor's decision to axe tax relief for agricultural properties worth over £1m.
Insurers have reported a rise in individuals looking to take out policies in the wake of the Budget. Life assurance policies pay out when the holder dies, while insurance pays out if the holder dies within a specified period.
Mr Perez's policy will cover him for 10 years: 'Should it not be changed in the next 10 years, hopefully, we'll get a government in, whoever it might be, who'll see common sense.'
However, given the size of his business empire, he said his initial £6m policy would not be big enough to pay for his inheritance tax bill if he died.
He said: 'That's the first quote I've had, but I'm probably going to have to increase that to at least £10m. I've got no incentive to grow the business now. In fact, it's a disincentive to grow the business because it's going to cost me more.
'I've got potential greater inheritance tax liability, and now the bigger the business grows, the more I'm going to have to pay out in life insurance.'
The Treasury was contacted for comment.
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