Two elderly sisters who have been trying to change Britain’s inheritance tax rules are making one last stand at the European Court of Human Rights.

Joyce and Sybil Burden have lived together all their lives. Their home and the small farm around it in Wiltshire is worth an estimated £875,000. The problem facing the sisters is that when one of them dies, the other will have to sell up and move out to pay the costs of crippling inheritance tax which is levied at 40% of the value of the estate apart from the first £300,000.

They decided to appeal to the European Court of Human Rights last year when gay and lesbian couples who enter into civil partnerships were given the same rights as married couples so that the surviving partner doesn’t have to pay inheritance tax when the other one dies. Joyce, who is 89, and Sybil who is 81, want the same rights to be extended to family members who cohabit.

The sisters lost their case at the European Court last December when a chamber of seven judges ruled against them by the narrowest of margins of only 4 – 3. On 12th September this year they put their case before Strasbourg’s grand chamber of 17 judges who are expected to give a final ruling within the next few months.

Sybil Burden has said that she feels looked down on as a second class citizen for being single. “Our father worked hard all his life for this house so why should it be taken away from his family?”  

According to a survey carried out for the BBC, 60% of people would like to see inheritance tax scrapped even if it meant paying more income tax. However, as it raises more than £3bn revenue each year that seems unlikely.

A welcome compromise would be to raise the threshold at which tax is paid.  It is currently £300,000. However, the threshold would need to be £430,000 in order to keep pace with house inflation over the last ten years.

Rising property prices mean homeowners with a house of little more than average price can expect to be liable for inheritance tax in the next 10 or 15 years. If you die leaving an estate worth £500,000 and you don’t have a spouse or civil partner, then £80,000 could go to the taxman. Even if you are married, it is still possible that your spouse and your family could lose out on thousands of pounds.

However, it is possible to significantly reduce the burden of inheritance tax if you plan ahead. Please contact us for further details.