Two elderly sisters, who have lived together in the family home since they were children, recently lost their claim that they should not pay IHT when the first of them dies. The family property is of sufficient value to cause the surviving sister to face a considerable IHT liability when the other dies.
The sisters, both of whom are in their 80s, argued that the way the law works was a breach of their rights under the European Convention on Human Rights and took their case to the European Court.
IHT law permits only transfers between civil partners and spouses to be IHT-free. Transfers between other people living in the same house – even between couples who have cohabited for substantial periods – do not benefit from the IHT exemption.
At the time of writing, it is uncertain whether the sisters will attempt to appeal the ruling by seeking a hearing before the EU’s Grand Chamber.