Siblings lose inheritance tax battle

Two elderly sisters have lost their European Court of Human Rights’ appeal against inheritance tax liability.

Joyce and Sybil Burden— both in their 80s—have shared the house they inherited from their father for 30 years. They appealed to the Grand Chamber to overturn the ruling of the lower court that they should be liable for inheritance tax when one dies. The unmarried sisters claimed they were victims of discrimination since they are prevented by law from entering into a civil partnership and thus cannot take advantage of the exemption to paying any inheritance tax on the first death.

However, the Grand Chamber found by a 15-2 majority that because the sisters’ relationship was of a different nature to that of married couples and homosexual partners they had not suffered discrimination. Julian Washington, a partner at Forsters LLP, says there will be sighs of relief at the Treasury. “The Grand Chamber decided the UK government was entitled to give preferential tax treatment to spouses (and now same sex civil partners). The relationship of the two sisters was quite different: they had chosen to cohabit as siblings but they did not fall into the privileged categories which the UK was entitled to recognise,” he says.