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29 Apr 2008
Two elderly unmarried sisters have lost their appeal against a European Court of Human Rights ruling that they should pay inheritance tax when the first of them dies.
The Court held, by 15 votes to two, that there had been no violation of article 14 concerning prohibition of discrimination along with article 1 on protection of property of the European Convention on Human Rights.
The judgment stated: ‘The absence of a legally binding agreement between the
applicants renders their relationship of co-habitation, despite its long
duration,
fundamentally different to that of a married or civil partnership couple.’
Joyce Burden, 89, and her sister Sybil, 82, of Marlborough, Wiltshire, have
lived together for their entire lives and cared for four relatives. They
inherited the house they currently share from their father, and have lived there
for more than 30 years.
The pair made wills that the first to die would leave their entire estate to the surviving sister. However, under UK law, on the first death there would be an inheritance tax of 40% of the value of the surviving sister’s share exceeding £312,000 for the 2008/2009 tax year.
If they were married or in a civil partnership, there would have been an exemption to paying inheritance tax on the first death. However, as siblings they could not enter a civil partnership - the sisters complained that this amounted to discrimination.
The sisters lost their substantive claim they should be entitled to the same exemption as a married or civil partnership couple by a margin of three votes to four at an ECHR hearing last year.
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Visitor comments Add your comment
Sisters lose inheritance tax appeal
always a difficult subject,especially if there are no liquid assets in the background. Also depends upon whom they wish to eventually inherit the asset. However they could leave the nil rate band to each other and the surplus of the 50%share to a suitable charity. Hopefully the charity would allow the survivor to continue living there for the rest of their life.
Posted by: Michael Hughes, 29 Apr 2008 | 00:00
Inheritance Tax (IHT) from Ashwood Law
As other respondents have said, this is a more difficult situation. Whilst emotion may indicate the unfairness of this case, the strict letter of the law clearly shows that the ladies cannot avoid inheritance tax using this avenue until the law is changed.
Posted by: Gordon Diffey, 30 Oct 2008 | 00:00