How much does Harry Potter owe Philip Hammond?
14 July 2016 by Diane Rudd
Harry Potter, that well known wizard who hundreds of people daily pay homage to at Platform 9 3/4 of Kings Cross Station outwitted his arch enemy Lord Voldemort but there was one institution which even he could not beat – the tax man.
Harry had two main inheritances when young, being from his parents and from his godfather Sirius Black. From his parents he inherited many valuable wizarding coins and from his godfather he inherited a property and its contents.
If his parents inheritance had been received today and had been worth say £2m then assuming that his parents had not made substantial lifetime gifts within seven years of their deaths the taxman would have asked Harry for £540,000 being £2m less an assumed double tax allowance of £650,000 the balance being multiplied by 40%.
Sirius Black’s inheritance would have incurred much more tax. The property was in Islington (12 Grimauld Place) and was spacious with three floors and could have been a listed building. Equivalent properties today could be valued in the region of £4m. Sirius had never married and so only had his own £325,000 tax allowance so the tax on the house would have been £1,470,000. There would have been further tax on the house contents.
Harry did not sell 12 Grimauld Place and could have elected to pay the tax over 10 years by equal instalments but J K Rowling gives us no clue as to whether this occurred. If Harry had made an election to pay the tax over a decade the taxman would have charged interest.
Something which may have puzzled the taxman would have been the valuations of the house the contents and the wizarding coins. The house was invisible to most people and so the local District Valuer would have had a difficult job in agreeing the value. The contents were also unusual including for example a music box which tried to send the listener to sleep and a portrait which screamed. The wizarding coins would also have caused confusion at the Tax Office as a formula for valuing such coins would not have been in their manual.
Perhaps the taxman needed a wizard of its own to sort out the considerable tax due – the new Chancellor Philip Hammond may have to advertise for such a person!
Add 'make a Will' to your to-do list...#whatsonyourlist https://t.co/VFT7IqrZW7 https://t.co/DCLoHW322R1 day
Need help remembering your to-do's? Claim your free fridge magnet today! https://t.co/e3ZNkWrk0I2 days