Scotsman: Sisters lose fight to avoid crippling inheritance tax

By GEOFF MEADE
IN BRUSSELS
THEY have been campaigning against inheritance tax since Jim Callaghan was prime minister. But yesterday two elderly sisters fighting for the same rights as married couples lost a final appeal for equal treatment.

In a 15-2 vote, the European Court of Human Rights in Strasbourg ruled that Joyce and Sybil Burden, who have lived together all their lives, do not face unfair discrimination under UK inheritance tax rules.

Joyce, 90, and Sybil, 82, have been fighADVERTISEMENTting for decades to avoid crippling inheritance tax on their home in Wiltshire when one of them dies.

They argued UK law breached their human rights by exempting married and gay couples from inheritance tax, while targeting cohabiting siblings.

But the Grand Chamber of the human rights court upheld an earlier ruling that national governments had some discretion in deciding tax arrangements.

The decision means that when one sister dies the other will have to sell the four-bedroom property in Marlborough to pay the 40 per cent inheritance tax on its value above £300,000.

If they had won their case, UK inheritance tax law would have had to change, to put cohabiting couples on an equal footing with married couples and civil partnerships in being exempt from inheritance tax.

The sisters have been fighting the battle for decades – writing to the chancellor of the day before every Budget since 1976, pleading for recognition as a cohabiting couple. And when the UK Civil Partnership Act of 2004 recognised gay and lesbian couples for inheritance tax purposes, the sisters turned to the European Court of Human Rights, claiming the act violated Human Rights Convention articles outlawing discrimination.

In 2006 the Burdens lost the case by a 4-3 majority of the panel of seven human rights judges – although three members of the court described their inheritance tax plight as "awful". But the appeal, before a 17-member panel of human rights judges, produced a 15-2 majority against the sisters yesterday.

The TaxPayers' Alliance condemned the ruling. Matthew Elliott, its chief executive, called it "a sad verdict for anyone who wanted to do the right thing and save for their family's future".

The judges said the legal consequences of civil partnerships, just like those of marriages, set such relationships apart from other forms of cohabitation.

They went on: "The absence of such a legally binding agreement between the applicants rendered their relationship of co-habitation... fundamentally different to that of a married or civil partnership couple."

Carole Hope, a partner in Murray Beith Murray, solicitors and asset managers in Edinburgh, said:

"Unmarried people will continue to be liable for a higher proportion of inheritance tax on their estate than those with spouses or civil partners."

The sisters vowed to keep battling despite their "bitter disappointment". They said: "We are still struggling to understand why two single sisters in their old age, whose only crime was to choose to stay single and look after their parents and two aunts to the end, should find themselves in such a position."