‘A matter of political expediency’: Iran, Britain, South Africa and the settlement of Reza Shah's estate

ABSTRACT

When Reza Shah, the former ruler of Iran, died in exile in Johannesburg, South Africa, in 1944, he left some £110,000 in cash in his bank account and valuables and other items worth another £20,000. But he left no will; and the Union government proceeded to impose a tax amounting to over £43,000 (one-third of the total value) and to distribute the remainder among heirs as specified in Union law for persons who had died intestate. Reza Shah's son, Mohammad Reza Shah, the ruling Iranian monarch, hard up for money, fought these requirements. He claimed everything in his late father's possession was his, and that neither estate taxes nor distribution to heirs applied. A four-year battle over the estate ensued. It was eventually resolved, but only after vigorous efforts by two British ambassadors to Tehran, endeavours at the highest levels of the British government; the involvement of the South African prime minister and, finally, an act of the South African parliament. This article examines the intricate tug-of-war surrounding the settlement of the estate of Reza Shah and what it tells us about the principal parties involved.

Acknowledgments

British National Archives cited in this article include the Foreign Office (FO) and the Dominions Office (DO) correspondence.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Moodie and Robertson, Solicitors, Pretoria, to Office of the High Commissioner, 17 August 1944, DO 119/1276. A copy of the inventory is attached to J. S. Somers Cocks, British Embassy, Tehran, to Moodie and Robertson, 25 April 1945. See also a clipping from the Rand Daily Mail, 28 September 1944, ‘Ex-Shah of Persia Leaves £129,317 Estate in Union’, which lists the main items in the inventory. Both items are in the same folder. For a slightly revised assessment of the value of the estate, completed after the furniture had been sold and other requirements had been addressed, see reference in endnote 3.

2. For these calculations, based on an annual inflation rate of about 3.8 per cent, see the tables accessible at www.measuringworth.com.

3. See the list attached to executor's final report, ‘First Liquidation and Distribution Account in the Estate of the Late Reza Pahlavi’, enclosed in McRobert, de Villiers and Hitge to the High Commissioner, South Africa, 23 January 1947, FO 371/61976.

4. British Embassy, Tehran, to Messrs. Moodie and Robertson, Pretoria, 25 April 1945, DO 119/1276.

5. This sum would have translated into nearly £10 million. The exchange rate in 1941 was 68.8 rials to the pound sterling. The value of the rial fell sharply in the following year and continued to drop during the war.

6. Bullard, Tehran, to Foreign Office, No. 23, 24 April 1945, FO 371/45496. The 678 million rials would have been worth £9.8 million at 1941 conversion rates. The value of the rial fell precipitously against the British pound in 1942.

7. High Commissioner in South Africa, to Dominions Office, No. 604, 16 July 1945, FO 371/45496.

8. The phrase, ‘return to giver’, is Bullard's. See Bullard, Tehran, to Foreign Office, No. 945, 3 September 1945, FO 371/45496 and also Dominions Office to High Commissioner, South Africa, No. 610, 4 September 1945, DO 35/1206.

9. Bullard to Foreign Office, No. 1124, 12 October 1945, FO 371/45496.

10. High Commissioner, South Africa, to Dominions Office, No. 741, 6 September 1945, FO 371/45496; and Moodie and Robertson, Solicitors, Johannesburg, to H. D. Tonking, 29 September 1944, DO 119/1276.

11. High Commissioner, South Africa, to Dominions Office, No. 984, 21 November 1945, FO 371/45496; and ‘Excerpt of letter from Messrs. MacRobert, de Villiers & Hitge, Solicitors, Pretoria, 20 November 1945 to the Master of the Supreme Court, Pretoria’ in DO 35/1206.

12. High Commissioner, South Africa, to Dominions Office, No. 28, 28 January 1947, FO 371/61976.

13. Le Rougetel, Tehran, to Bevin, Foreign Office, No. 474, 25 November 1946, DO 35/1206.

14. Dominions Office to Acting High Commissioner, South Africa, No. 566, 25 November 1946, DO 35/1206.

15. Bullard, Tehran, to Foreign Office, No. 70, 12 July 1945, FO 371/45496.

16. Le Rougetel, Tehran, to C. W. Baxter, Foreign Office, 26 February 1947, FO 371/61976.

17. N. Butler, Foreign Office, to Le Rougetel, Tehran, 19 April 1947, FO 371/61976.

18. High Commissioner, South Africa, to Dominions Office, No. 702, 27 August 1945, E 5118/1077/34, FO 371/45496.

19. Bullard, Tehran, to Foreign Office, No. 945, 3 September 1945, FO 371/45496.

20. Secretary, Board of Inland Revenue to the Under Secretary of State, Foreign Office, 2 January 1947, FO 371/61976.

21. MacRoberts, de Villiers and Hitge, Solicitors, Pretoria, to the High Commissioner, Cape Town, 23 January 1947, FO 371/61976.

22. Le Rougetel, Tehran, to Bevin, Foreign Office, No. 474, 25 November 1946, DO 35/1206.

23. Le Rougetel, Tehran, to Foreign Office, No. 164, 1 February 1947, FO 371/61976.

24. Le Rougetel, Tehran, to C. W. Baxter, Foreign Office, 26 February 1947, FO 371/61976.

25. MacRobert, de Villiers and Hitge, Pretoria, to the High Commissioner for the United Kingdom in Great Britain, Cape Town, ‘Re: The Estate of the Ex Shah of Persia’, 23 February 1947, p.3, FO 371/61976.

26. Ibid.

27. Minute on the cover folder of file E1467/10/34, 23 January 1947, FO 371/61976.

28. G. W. Baxter, Foreign Office, to Le Rougetel, Tehran, 12 March 1947, FO 371/ 61976.

29. Le Rougetel, Tehran, to Foreign Office, No. 550, FO 371/61976.

30. Minute on Le Rougetel's letter by L. F. L. Pyman, Foreign Office, 6 May 1947, E3693/210/34, FO 371/61976.

31. C. W. Baxter, Foreign Office, to the Secretary, Board of Inland Revenue, 17 February 1947, E1058/19/34, FO 371/61976.

32. J. F. Huntington, Secretary, Inland Revenue to the Under-Secretary of State, Foreign Office, V.B. 1578/1946, 10 March 1947, FO 371/61976.

33. N. Butler, Foreign Office, to Sir John Stephenson, Dominions Office, E 3693/10/34, 12 May 1947, FO 371/61976.

34. Foreign Office to Tehran, No. 547, 15 July 1947; and Office of High Commissioner, Pretoria, to G. E. Boyd Shannon, Commonwealth Relations Office, London, No. F/27, 12 July 1947, both in FO 371/61976.

35. Foreign Office to Tehran, No. 175, 22 March 1948, FO 371/68726. The process was complicated. In September 1947, the executor of the estate paid the commissioner of internal revenue a sum of nearly £42,000 out of estate funds to cover the estate duty, in anticipation that the money would be refunded once parliament voted to approve an additional appropriation. (See J. D. Pohl, Department of External Affairs, South Africa, to H. H. Sedgwick, Office of High Commissioner, Pretoria, 17 September 1947.) The Union government then submitted to parliament and secured approval for a remission of death duties of £45,252. (Foreign Office to Tehran, No. 72, 6 February 1948, FO 371/68726.) This figure is somewhat higher than the original estimate by the executor of the sum of £43,800 for estate and succession taxes (see p.1 above) and also in excess of the sum paid by the executor to inland revenue. But this discrepancy may be due to a later recalculation of the value of the estate, expenses incurred, and the taxes due.

36. Commonwealth Relations Office to Foreign Office, No. F 2540/7, 30 December 1947, FO 371/61976; and B. A. B. Burrows, Foreign Office, to Le Rougetel, Tehran, 24 January 1948, FO 371./68726.

37. See minute by L. F. L. Pyman, Foreign Office, 10 January 1948, E12006/1006/34, FO 371/68726.

38. Le Rougetel, Tehran, to Foreign Office, No. 1151, 8 November 1947, and the appended FO minute to this cable, FO 371/61978.

39. The correspondence and materials relevant to the affidavit are in FO 371/68726. The signed affidavit itself is not in the file, probably because it was sent to the Commonwealth Relations Office for transmission to the Union government, but a draft which it closely followed is in this file at E 2945/1006/34. The file also contains Le Rougetel's signed and sealed declaration certifying to Malik Ismaili's qualifications to issue the affidavit; the cover letter from the British Embassy in Tehran to the Foreign Office (E 4854/1006/34), and a letter from the Foreign Office to the Commonwealth Relations Office (also in E 4854/1006/34), dated 21 April 1948, transmitting the affidavit to the CRO.

40. British embassy, Tehran, to Foreign Office, No. G 197/21/48, 16 June 1948.

41. An itemized list of the items shipped is enclosed in H. W. Woodruff, U. K. Trade Commissioner, Pretoria, 5 August 1948, FO 371/68729.

42. Same to same, No. L 1399, 5 August 1948, FO 371/68729.