Page last updated at 12:30 GMT, Tuesday, 29 April 2008 13:30 UK

Q&A: The Burdens' inheritance tax

Two elderly British sisters have lost a lengthy court battle to avoid paying inheritance tax when one of them dies.

What was the case about?

Joyce and Sybil Burden, aged 90 and 82, have lived together in Wiltshire all their lives.

Joyce Burden, 90, (left) and her sister Sybil, 82
Joyce Burden and her sister Sybil have been fighting to avoid inheritance tax

They were fighting to avoid paying inheritance tax (IHT) on their home when one of them dies and had turned to the European Court of Human Rights.

They asked the court for the same tax rights as married and gay couples, which do not apply to cohabiting siblings.

However, judges in Strasbourg ruled against them, saying they did not face unfair discrimination.

What are inheritance tax rules?

Inheritance tax is a form of death duty that is paid by your executors, the people who manage your will after your death. About 40,000 estates a year are subject to IHT.

It is charged at 40% on all assets worth more than a certain amount - currently 312,000 - left behind when someone dies, although assets left to a spouse are exempt from the tax.

The threshold above which the value of estates is taxed at 40% was 300,000 from April 2007.

For the tax year 2008-2009 it rose to 312,000, in 2009-2010 it rises to 325,000, and in 2010-2011 to 350,000.

In 2007 Chancellor Alistair Darling doubled the value of assets which couples can leave behind when they die without incurring IHT.

Married couples and civil partners now have a combined threshold of 600,000, rising to 700,000 by 2010.

This means that when the second partner dies, inheritance tax will not be charged on the first 600,000 of their estate, provided none of the allowance was used when the first partner died - if assets were left to children or other family, for example.

What did the Civil Partnership Act 2004 decide?

It granted the same rights that married couples enjoy - including for inheritance tax - to gay and lesbian couples but not to family members.

The Burden sisters said this amounted to discrimination under the terms of the European Convention of Human Rights and launched their legal battle in that court.

What does the European Court's ruling mean for the Burdens?

The decision, according to the sisters, means that when one of them dies, the other may have to sell their 875,000 four-bedroom property in Marlborough.

Assuming the house is jointly owned, the surviving sister would have to pay inheritance tax of 40% on the value of the inherited half of the property, once the appropriate threshold had been deducted.

Is there any hope now for the Burdens' case?

The sisters have written to the Chancellor of the Exchequer the day before every Budget since 1976, pleading for recognition under the tax rules as a cohabiting couple.

But this ruling marks the end of the road for the sisters' lengthy legal bid.

The Burdens first lost their case in 2006 by a 4-3 majority, despite three members of the court described their inheritance tax plight as "awful" and "particularly striking".

But this recent appeal hearing, which was put before a larger panel, produced a 15-2 majority against the sisters.

The judgment said: "The absence of such a legally-binding agreement between the applicants (the Burdens) rendered their relationship of co-habitation, despite its long duration, fundamentally different to that of a married or civil partnership couple."

Speaking after losing the first human rights case in 2006, Joyce Burden said: "If we were lesbians we would have all the rights in the world.

"But we are sisters, and it seems we have no rights at all."

Sisters lose European tax battle
29 Apr 08 |  Wiltshire
Fresh appeal in sisters' tax case
11 Sep 07 |  Wiltshire
Sisters lose inheritance tax case
13 Dec 06 |  Wiltshire


Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2018 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific