Sibling Couples

Lord Forsyth of Drumlean Excerpts

Thursday 21st March 2019 Lords Chamber

[Lord Bates]

There would be a tax consequence, because the spousal transfer in inheritance tax costs the Treasury some £2.5 billion per year. To extend the scope of that would involve a charge, and our judgment is that this case does not merit that.

[Lord Forsyth of Drumlean (Con)]

My Lords, given that the Financial Secretary to the Treasury has refused on four occasions to come to the Economic Affairs Committee and its sub-committee on the loan charge and shown himself unwilling to look at the evidence of hardship being caused, might my noble friend try lobbying the Chancellor on this matter instead? Could my noble friend acknowledge that this is not about avoiding inheritance tax? This is about people being able to continue to live in the family home. It is unjust. Is the Liberal Democrat policy not absurd—that the ability to live in the family home should depend on having a sexual relationship rather than a caring one?

[Lord Bates]

My noble friend makes his point. His point on the loan charge was debated here last night, when he and his representations were mentioned in dispatches by my noble friend Lord Wakeham. However, the point remains that we feel that there is a small number of cases. If a property is worth £1 million, and you divide it and take into account the personal thresholds of £325,000 times two, the liability on the death of one sibling will amount to some £70,000 in tax, which can be spread over 10 years.