Wednesday, April 30, 2008

The Burden sisters’ unjust tax burden

Meet Joyce and Sybil Burden, aged 90 and 82 respectively. They have just lost their final battle in the European Court of Human Rights to avoid paying inheritance tax when one of them dies.

Their case is summed up by Joyce Burden herself, who 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.”

This is the appallingly unjust state of affairs we have in the United Kingdom. An elderly couple of siblings (the gender make-up is immaterial) who have lived together in Wiltshire all their lives have fewer rights than cohabiting homosexuals in a civil partnership. For these sisters, it means that when one of them dies the other will have to sell their £875,000 four-bedroom property in Marlborough in order to pay an inheritance tax bill of around £56,000.

Yet the European Court affirmed that the tax rights enjoyed by gay couples do not apply to cohabiting siblings, and they therefore have not suffered unfair discrimination. And this was a decisive judgement with a 15-2 majority. The judgement said: ‘The absence of such a legally-binding agreement between the applicants (the Burdens) rendered their relationship of cohabitation, despite its long duration, fundamentally different to that of a married or civil partnership couple."

Of course it is fundamentally different, but so is marriage from civil partnership, which the ECHR now conveniently lumps together.

It is curious indeed that the state now recognises a cohabiting same-sex couple in a loving (eros) relationship, but not a same-sex cohabiting couple in a loving (storge) relationship. And so erotic love trumps familial love, and the unconditional (agape) love of God is tested further still.

Well, Cranmer has an idea…

Since there is nothing in law which states that a same-sex civil partnership must involve genital activity - with the evident sheer impossibility of the state ever proving that such a union has ever been consummated - Cranmer exhorts these sisters to register their partnership through the usual channels, and see what the state does when two sisters apply for a civil partnership as ‘non-conjugal’ lesbians.

The publicity of their plight would be global, and Cranmer is 99.9% certain that the Conservative Party would step in and vow to end such injustices, and pledge itself to introduce an amendment to the Civil Partnership Bill which would recognise cohabiting brothers, sisters, or parents with grown-up children who care for them. Such a clause was originally moved by Edward Leigh MP in 2004, upon which the Conservative Party was split (on a free vote) by 63-34 and 43-39 at Third Reading.

A bit of whipping for such a popular cause would do Mr Cameron the world of good.

28 Comments:

Blogger Liz Ford said...

I hope Your Grace will forgive the irrelevance of this comment to the posted topic (which can be summed up as 'scandalous'), but I just wished to ask if Your Grace would mind being added to my blog roll?

30 April 2008 at 09:07  
Blogger Cranmer said...

Irrelevant, indeed. But how could His Grace resist the spreading abroad of his fame?

He would be delighted and honoured to be added to your blogroll, and he shall return the honour.

30 April 2008 at 09:12  
Anonymous Cynical Voter said...

This situation is worse than suggested because Capital Gains Tax is levied in addition to IHT if the transfer between sisters results in a subsequent sale at a higher price. The change to IHT put forward since 9th October (if applied for) would give them only £640,000 of exemption leaving a £235,000 taxable liability at 40% and the lawyers would need to file Form IHT200 with its 53 pages.

The situation in Britain amounts to expropriation. Roman Abramovitch, Margaret Thatcher, Rausings, Mittals, Ecclestones etc will not have this problem but ordinary people burdened with house price inflation but no other real assets are crippled by a perverse Inheritance Tax regime that hits the middle class but exempts the rich, especially the foreign rich.

Unjust it certainly is. The ECHR ruled in first instance against them but with understanding of their plight, the Grand Chambre had no ability to rule otherwise since no tax harmoinsation exists within Europe - and I doubt it would favour the sisters if the EU did harmonise Inheritance Taxes as the Commission desires.

The simple fact is that the sisters did not take tax-avoidance measures and the Conservative Government which set IHT and CGT at 40% in 1988 did not index link the exemption limits to house prices but to the RPI.

30 April 2008 at 09:45  
Blogger The Heresiarch said...


He would be delighted and honoured to be added to your blogroll, and he shall return the honour.


Your grace will probably remember that I added his remarkable site quite some time ago, yet I still await his benediction. Is it 'coz I is a heretic?

30 April 2008 at 09:49  
Blogger Cranmer said...

Mr Heresiarch,

Not at all. He has no recollection of the request.

He shall rectify when he is next housekeping.

30 April 2008 at 10:52  
Anonymous woman on a raft said...

Cranmer exhorts these sisters to register their partnership through the usual channels, and see what the state does when two sisters apply for a civil partnership as ‘non-conjugal’ lesbians.

It will be refused as they are ineligible by virtue or being within the prohibitied degrees of relationship as they would be for marriage. See Civil Partnership Act 2004, Part 1 Schedule 1, Absolute prohibitions. The registrar will just nod sympathetically and advise them that if they make false statements to secure the registration, they could be committing some other offences.

Being gay does not trump being sisters or brothers or parents. They are ineligible to register the civil partnership for the same reason as they are ineligible to be married; not because they are the same sex but because they are siblings.

The sisters appear to have asked the wider question: 'why can't you civil partnership your sister?' and the answer is: 'because civil partnership mirrors the prohibited degrees of relationship for marriage, and since you can't marry your mum, dad, brother or sister, you can't civil partner them either'. You can be as gay as a row of chiffon tents, asexual or as straight as Vladimir Putin; you still can't marry your brother or your sister here.*

If Your Grace wants to scrap IHT, that's absolutely fine by me; a respectable argument can be made for that (it is one of the taxes which could and should be simplied by scrapping it) but that is an argument about redistribution and taxation policy, not sexual politics.

At this stage I doubt that the Conservative party would scrap IHT (although I wish they would) and any choppy amendments relying on the definition of cohabiting would cause more trouble than they are worth.

What the sisters need are fewer lawyers and better financial adivsors.

*It is possible there is a tiny lacuna developing. If the sisters find a place where sibling marriage is recognized, they could get married there and argue that it must be recognized here much as polygamy has been recognized for tax purposes. There doesn't seem to be such a jurisdiction available at the moment, but maybe somebody knows different.

30 April 2008 at 11:02  
Blogger The Heresiarch said...

It was on the occasion of yr Grace's 2nd anniversary that I offered this means of congratulation. Of course I didn't presume to request reciprocation: that's not up to me. But I did presume to hope.

30 April 2008 at 11:06  
Anonymous Anonymous said...

Surely the "degrees of consanguinity" regulations in ordinary marriage are to avoid hereditary disease, and are irrelevant in the cases of single sex relationships. Are different sex relationships within the degrees assumed to be incestuous?

30 April 2008 at 11:10  
Blogger Cranmer said...

Ms Woman on a Raft,

The above anonymous entry is correct. The law which forbids siblings to marry is based on Old Testament law for the reason stated. Since so much of the nation's Judaeo-Christian heritage is being eroded, it would be consistent to at least test this in law - it must somehow be a 'human right' to fall in love with whom one wishes, and to remain celibate.

The ineligibilities that there are for marriage cannot be the same as for civil partnerships, not least because children cannot be a consequence of civil partnership. Now that the definition of marriage has been tampered with, it opens up a whole raft of new possibilities.

30 April 2008 at 12:11  
Blogger Little Black Sambo said...

"They are ineligible to register the civil partnership for the same reason as they are ineligible to be married; not because they are the same sex but because they are siblings."
But why does is this rule being applied? Well, we all know why: because civil "partnership" means newly-invented homosexual "marriage". The Govt has always denied this, but it is verbal quibbling. The instigators of these partnerships have been determined to to establish them as equivalent to and as acceptable as marriage - hence the requirement that there must be a potential sexual relationship (assumed to exist even if it doesn't) and the imitative list of forbidden degrees; the clergy are ordered to be accomplices by registering bachelors and spinsters as "single". (Does any one know how successful that piece of bullying has been? It has not been obeyed round where I live.) Everybody - the churches, clergy, society in general - all have been drawn into this Government's preoccupation with altering the way we behave and the way we think, so that the very nature of creation and of family life appears to change. And what is their motive? Is it simply hostility to anything that existed before this stinking gang took over?

30 April 2008 at 12:14  
Anonymous Terry said...

The solution is for each sister to find a nice helpful young and single female lawyer (or indeed any other single female), form a civil partnership with them, and remake their wills so as to give each lawyer a life interest with power to immediately terminate it in favour of the surviving sister. That way there will be guaranteed no inheritance tax when one sister dies.

30 April 2008 at 13:29  
Anonymous Daniel said...

The usual standard of bigoted nonsense here. Of course they should be prevented from forming a Civil Partnership, they're Sisters - I think you'll find it'd be illegal.

This has nothing to do with these sisters and is entirely an opportunity for you to push the anti-gay agenda. God forbid that us Gayers get any rights that the rest are not afforded.

Tell me Cranmer, did you complain so heartily about the treatment of cohabiting couples for purposes of IHT BEFORE civil partnerships were enacted? Surely, if it is inappropriate for them to be treated thus now, then it was then? No? Really? I am surprised - and neither did Edward Leigh according to his Hansard record.

This has nothing to do with the treatment of these ladies, and everything to do with the fact you and the constituency you represent can't stand the fact that Gay people who commit to be life-long partners, who want nothing more than to be afforded the same protection of their legal rights under law as married people, have now received such protection - and a bloody good thing it is too.

Fabulous little segue about erotic love trumping familial love; absolute rubbish too - of course, you wrote it to provoke a little turn of the stomach in your readers - just a little reminder about the sex lives of gay people. Can Gay people in love who wish to enter into Civil Partnership not think of themselves as a family - or the start of one - can they not experience the belonging of the individual into coupledom; is this not the purest expression of familial love?

I really do wish you tiresome homophobic bigots would just fuck off, but while ever you publish this crap in the public domain, I'll pop up to tell you it's ill-thought out bigotry, disguised as concern.

30 April 2008 at 14:28  
Anonymous Anonymous said...

Daniel - it is His Grace and others commenting here who will, in the end, be the victims of "ill-thought out bigotry, disguised as" human rights. This is a cause for concern.

30 April 2008 at 14:39  
Anonymous G Eagle Esq said...

Your Grace

The Legal System has lost its way - perhaps we would get a more reliable system by sacking ALL the Judges (whose opinions are so unpredictable and often bizarre) and replacing them with tossing a Coin 5 times

How can anyone have confidence in Human Rights or European legislation when this case was decided by a 16 to 2 Majority

This surely indicates that :

1. the case could easily have gone the other way, if other Judges had been serving on the Court, because both sides were equally arguable

and

2. the Law is impossible to predict in such cases

It is no wonder that the outgoing Head of the Serious Fraud Office was unable to predict whether his actions would (or would not) be approved by the High Court or by the House of Lords

Yr Grace's obedt servant etc

G E

30 April 2008 at 14:42  
Anonymous woman on a raft said...

Are different sex relationships within the degrees assumed to be incestuous?

Yes. Not just assumed: some are explictly criminal offences under s.64 and s.65 of the Sexual Offences Act 2003, although the word 'incest' does not seem to be used in the relevant English law at the moment. It is pretty much what you would think of as incest if asked, except be careful to distinguish places where there is no consent or a minor. These are not incest - they are other forms of sexual offence (although we might once have used that description.)

"The ways that A may be related to B are as parent, grandparent, child, grandchild, brother, sister, half-brother, half-sister, uncle, aunt, nephew or niece." Please see both those short sections: the Act takes no regard of whether a child could result from consenting adult sex between these relations; it is the fact that they are in a prohibited degree which matters. It applies as much to two sisters as two brothers. The law here is saying: 'we don't care if you are both consenting adults; sex is not legal.

This list is actually a little shorter than the list of prohibited degrees of relation in the civil partnership act, (CPA) but one would have to check carefully for updates as to which applied. The categories can be, and are, updated. The result is there are some people who you could have sex with legally, but you could not form a civil partnership with them.

Whilst degrees of consanguinity may provide an ancient underpinning for who can marry whom, the complexities of modern property and family law have produced a large number of categories which are based on other legal relationships, all of which are a prohibited degree of relation and a bar to marriage. Consanguinity is a small subset of the people you can't marry. A person may even change category from someone you can't marry to someone you can as a result of the death of a third party whose existence previously barred the marriage.

The phrase 'degree of relation' or 'relatedness' is used because it includes the relationships based on law as well as the ones based on blood.

30 April 2008 at 14:45  
Blogger Cranmer said...

Tell me Cranmer, did you complain so heartily about the treatment of cohabiting couples for purposes of IHT BEFORE civil partnerships were enacted?

Mr Daniel (or should His Grace call you Mr Thompson?),

Firstly, would you be kind enough to define 'bigot'? You appear to freely deploy the term without addressing the beam in your own eye.

And secondly, in answer to the question above: No, because His Grace had not reconstituted his ashes or acquired his august blog.

And thirdly, one might reflect on the fact that insult hurling is a refuge of the ignorant.

30 April 2008 at 15:29  
Anonymous woman on a raft said...

it must somehow be a 'human right' to fall in love with whom one wishes, and to remain celibate.

Nobody says they can't, Your Grace, so it is a right under what I would regard as proper English law, not this new-fangled Euro-law where you only get rights if somebody says you do. (How is that an improvement, eh?)

So long as they don't do anything illegal under S.64 or s.65 of the Sexual Offences Act 2003 no one can say anything against them. (Who would know?) They can love each other or intensely dislike each other but be living together for economic purposes; it makes no difference here. The issue is whether they have a right to a tax concession because it would be discriminatory to refuse them. They were just as disadvantaged before, because all their lives they have had have fewer rights than cohabiting heterosexuals in a marriage.

Your Grace appears to be arguing for another category of relationship which should get the tax breaks, and that the sisters should qualify because are one of the group who are prevented by being in a prohibited degree of relationship from forming either a marriage or a civil partnership, and yet their living arrangements mirror those ways of living in significant aspects.

Fine by me, but how many people do you want in this new category of relationship? Why should it be restricted to 2? There's nothing to say two brothers and a sister can't live together, and the fairly common constellation of a child remaining to look after parents is just as worthy of preferential tax treatment. Why should it just be those people who are in the prohibited degrees of relationship who get this extra legal leg-up? Why shouldn't any live-in carer be eligible if they are the would-be inheritor, even if they haven’t got married/partnered? Should it be contingent on whether one is a designated beneficiary?

All this provides is an endless argument as to who should be liable for IHT and who should not. Tell you what - just scrap IHT and be done with it.

30 April 2008 at 16:14  
Blogger Unsworth said...

Your Grace,

"A bit of whipping for such a popular cause would do Mr Cameron the world of good."

The prospect is too awful to contemplate.

30 April 2008 at 18:36  
Anonymous hear o israel said...

your grace
i feel your solution is more based on the anger of wonky human rights and gay co habitees , rather than a christian one . asking a couple of sisters to say they are lesbians to get some dosh , cranmer would have burn his hand first.

solution i think , is some sort of charitable trust set up, a bit of new legislation "non conjugal co habitees" , but i suspect it would be difficult to police , but if the tax man gets his slice when the deal is done what does it matter , so long as whilst alive they dont suffer, pecuniary disadvantage

30 April 2008 at 20:10  
Anonymous Daniel said...

Mr Daniel (or should His Grace call you Mr Thompson?)

Call me what you like, though I haven't the foggiest what your Mr Thompson reference is all about.

Firstly, would you be kind enough to define 'bigot'? You appear to freely deploy the term without addressing the beam in your own eye.

Bigot: A person of moral cowardice who seeks to demean the lives of others as they do not fit with his/her perception of that which is moral and just. I'd have thought you an expert, plenty of them hang about your blog.

And thirdly, one might reflect on the fact that insult hurling is a refuge of the ignorant.

Those will be the same insults you so freely hurl at the Gay community, would they? Since what you are saying is that two sister who live in the same house together ought to constitute the same legal bond as a loving couple who have entered into Civil Partnership, thus demeaning those people into the bargain. It would be a turn-up for the books if this were actually about money - it isn't - its about your perception of the moral collapse of society. Get this, it wasn't caused by Gay people not having to pay a few quid tax.

And thirdly, one might reflect on the fact that insult hurling is a refuge of the ignorant.

I'll take no lectures from you Cranmer on insults - this crap you spill out on Gay people is as insulting as anything else written here, by you or others. That you dress it up in your backward moral code does not disguise its true nature.

I note that you did not comment on my notion of familial love - that, I guess, is because love in your eyes, can only be that sanctioned by the celestial sky fairy - with his fascination around all things sexual. You complain about the language used, bottom line, you publish this stuff, then you should expect to be challenged.

Anon @ 1439; perhaps the church and its good followers are simply finding themselves on the wrong end of the treatment they dished out to others for hundreds of years. That does not make it right, but it might make them reflect on what it is like to be the persecuted rather than the persecutor.

30 April 2008 at 20:40  
Blogger mongoose said...

Your Grace, Terry's proposal above works for me. What we need is a couple of good sports who can be trusted.

And there are other arrangements which can be made. But, alas, the ladies are now of some seniority; time presses.

Alternative 1: It is possible to do a deal with the Taxman on some of these occasions. Flexibility exists if you know how to ask for it. "Look, the (surviving) old girl isn't going to live forever. How about your normal annual interest rate plus 2% until after she dies if you defer calling for the tax. We'll put a charge on the property for you. You can't lose and it's the decent thing to do for two blameless old ladies." Give a decent tax advisor a few bob and it might have been done.

Alternative 2: don't raise the matter at all until one of them dies and the other would probably be gone before it got through the process and the appeal through the courts. Too innocent and decent for such cynical shennaigans, I expect.

30 April 2008 at 22:01  
Blogger Cranmer said...

Bigot: A person of moral cowardice who seeks to demean the lives of others as they do not fit with his/her perception of that which is moral and just.

Mr Daniel,

Which some may consider just about sums up your attitude to His Grace and others who post comments upon his blog.

If you are not pleased with what you read here - notwithstanding that His Grace does not hold the views you appear to project upon him - you are under no compulsion to visit.

30 April 2008 at 22:48  
Anonymous Anonymous said...

mongoose;

Take this from your friendly tax-man

Alternative 1: Sorry, not viable. We can be flexible where the letter of the law has inadvertantly not carried out the intentions of Parliament (if someone drafted it badly) or if we have caused a problem/given poor advice. But we cannot ignore the law while offering flexibility. No 'decent' tax advisor would suggest such a thing, and if he suggested it to me, that would certainly ensure any penalties for non-compliance would be set in the highest order since to make such a bold suggestion is tantamount to an attempt at bribery.

Alternative 2: bit late for that, and there can be no 'appeal' against a correct tax assessment.

30 April 2008 at 23:09  
Blogger mongoose said...

AnonyTaxMan: that is, of course, the opening House position.

Re 1: I don't see bribery. "Tantanmount to an attempt at"? Pah.

Re 2: Indeedy? "You disagree. OK, we'll appeal that to the Commissioners." ("It'll be in about 20XX if we play our cards right and the lady will be dead.") Are they still "Special Commissioners"? It has been some time.

Come, Sir, you know the game. 'Tis a negotiation. Let us not pretend.

1 May 2008 at 01:48  
Anonymous Voyager said...

How about your normal annual interest rate plus 2% until after she dies if you defer calling for the tax. We'll put a charge on the property for you.

That is how it would work since the tax can be paid over ten years on property. That is however not the issue.

The issue is whether a primary residence not subject to CGT should be subject to IHT and why is it the only category unable to use exemptions is family-based ?

The disaster that the Government has caused by deliberately stoking housing inflation - it was negligible before Edward Heath let credit rip after 1971; and house price inflation was boosted by Thatcher; and Brown deliberately stoked a credit boom after 2001 which is why the British economy had a consumer boom.

It is not just negative equity that is the problem but the over-inflation of house prices under a regressive tax system that results - the rich are not affected but those in the middle are severely.

1 May 2008 at 07:15  
Blogger Tomrat said...

Your grace,

I agree with your solution; more so because it would be interesting to see the homosexual lobby's reaction to it, more so the governments realising this is yet another means by which people could remove themselves from the disasterous effects of IHT.

The LPUK has a forum in which they discuss this very same matter; obviously as a Libertarian the opinion resides that "civil partnerships" (inclusive of marriage) are the domain of the individuals involved in the "contract"; the state should only intervene where the life, liberty or property of the individuals is undermined. In effect the sisters could form such a partnership; it would be immaterials as it stands if the Libertarian party were in power as they would seek to devolve all forms of tax to sales taxation (including IHT and income tax, which would both be abolished).

Daniel,

You miss the point and attempt to fill in the blanks with petty, church-bashing, axe-grinding; What we have here are 2 sisters who find themselves nearing the end of their life and, having lived together for most (if not all) of their lives, now find that the taxation system treats them differently to a couple in exactly the same financial boat but another in terms of partnership (ordained by the state); if they were lesbians then ownership would pass from one to the other, meriting no IHT to be collected until the other passed away and it was inherited by a relative. Why this is the case and why the sisters cannot co-own on a similar legal footing is the travesty here - not that homosexuals enjoy better rights.

It is indicative of your mind set as a gay man what you said to the anonymous visitor though:

"Anon @ 1439; perhaps the church and its good followers are simply finding themselves on the wrong end of the treatment they dished out to others for hundreds of years. That does not make it right, but it might make them reflect on what it is like to be the persecuted rather than the persecutor."

In that this really isn't about an injustice visited on 2 old ladies because of faulty law making and the corrosive influence of political expediency but of social injustice you perceive to have on yourself. Again I will reiterate this is nothing more than flagrant axe grinding.

Why must everything be about revenge?

1 May 2008 at 13:23  
Anonymous Anonymous said...

mongoose said 'Come, Sir, you know the game. 'Tis a negotiation. Let us not pretend.'


No it isn't. Not when the facts are capable of being identified, which given that all that is required is a valuation of the property would make it straightforward. And the Commissioners, General or Special (there are both kinds), cannot hear an appeal based simply on the premise that 'the law is an ass'. The assessment has to be capable of being proven to be wrong.

Of course, the law is an ass, which this case more than adequately demonstrates, and I am grateful to His Grace for airing it on his august blog. There are other comparable situations - unmarried children not leaving family home so as to look after ill parents being one.

1 May 2008 at 18:55  
Anonymous Martin said...

Good Job! :)

7 June 2008 at 18:50  

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