 Maggie Fleming is Director of Isis Financial Planners, which is currently fighting for inheritance tax protection for lesbian and gay couples. She tells us why this issue is still of importance - despite the passing of the Civil Partnership Act.
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There has been a lot of euphoria about the introduction of civil partnership – due to happen later this year.
And so there should be – it’s ground-breaking legislation.
Hey, we have gay marriage in this country at last, whatever they choose to call it! If you’d asked me even 10 years ago, I’d have said it wouldn’t happen in my lifetime, but it has.
However, there are some people who didn’t live to see it.
And, because they died before it was possible to give their relationships legal status, the partners who survived them are paying a heavy price – literally.
Some months ago, our firm was approached by a man whose partner died late last year.
They had been together for many years and had campaigned for civil partnership. They were delighted when the Civil Partnership Act was passed and given royal assent in November last year.
They planned to be one of the first couples to register under the act when this becomes possible later this year. And then one of them died suddenly. And his partner is now facing a crippling inheritance tax bill and the possibility that he may have to sell the couple’s home in order to pay it.
Yes, while we’ve been cracking open the champagne and celebrating the fact that lesbians and gay men who choose to register their partnerships under the act will have tax equality with straight married couples, we’ve forgotten that, until registration becomes possible in December, people will continue to die and their partners will continue to suffer the inequalities of the current tax system.
This was one aspect of the tax system that most people in this country agreed was unfair.
If a married man died and left his wife a million pounds, the estate would not have to pay a penny in inheritance tax.
If a lesbian died and left her partner half a million pounds, the estate would face a bill of £90,000! And, if the only substantial asset in the estate were the house, chances were that it would have to be sold.
Everyone agreed that it was cruel that a grieving partner should have to surrender a home full of memories of their deceased loved one for tax reasons. As one (straight) person said when I explained how the system worked for gay men and lesbians – ‘it’s like something you’d find in Robert Mugabe’s Zimbabwe’. Quite.
So, when we were asked to help, we were happy to do so.
The man who approached us also made contact with a solicitor, Clive Margrave-Jones, whose firm, Margraves of Llandrindod Wells, were dealing with a similar case.
Legal advice was sought, as it was thought that couples where one died after the passage of the act might have a good case for not being liable to the tax. An appeal was also made to the Inland Revenue on compassionate grounds. Neither strategy brought results, however.
But what the legal experts did say was that they thought a case might be brought under the Human Rights Act, which came into effect for England and Wales in October 2000.
If successful, this would mean that anyone whose partner died after October 2000 might be able to reclaim the inheritance tax paid. This would include many more people than originally expected, including such high profile figures as Trevor Bentham, whose late partner was the wonderful actor, Nigel Hawthorne.
As a result of this legal opinion, a group has been formed for anyone who may be affected by this development – in other words, anyone whose partner died after October 2000 and who paid inheritance tax on the deceased’s estate.
There will also, sadly, be people who will suffer as a result of their partners dying between now and December.
One of my colleagues, Isis director Louis Letourneau, has offered to act as co-ordinator for this group. If you are affected by these issues, or if you know someone who is, please contact
for further information.
This isn’t the last battle we will have to fight before civil partnership puts paid to the worst discrimination on grounds of sexuality.
Only last week, I heard from a woman whose partner recently died. She had been a police officer and, despite the fact that she had had to retire young because of injuries received on duty, the surviving partner was not eligible for a pension.
I am sure that there are many people out there with a similar story of inequality and injustice to tell. Let us hope that the authorities responsible will decide to show some compassion in cases like these.
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