Inheritance Tax: Cohabiting Siblings

Lord Lexden Excerpts

Wednesday 10th February 2021 Lords Chamber

Asked by

[Lord Lexden]

To ask Her Majesty’s Government what plans they have to make transfers of property between long-term, cohabiting siblings exempt from inheritance tax.

[Baroness Penn (Con)]

My Lords, while the Government are understanding of the issue, there are no plans to exempt transfers of property between long-term cohabiting siblings. The inheritance tax spouse exemption is long-standing and reflects the formal legal obligations that marriage and civil partnership relationships necessarily entail. Extending that would be precedent-setting, as no analogous legal status exists between cohabiting siblings.

[Lord Lexden (Con)]

My Lords, can there be any doubt that siblings who share their lives in jointly owned homes represent strong, stable families? It is a fundamental principle of conservatism to support all families. Why therefore do the Government continue to deprive these families of the protections that they deserve, no less than married couples and civil partners, to ensure, among other things, that no bereaved sibling has to face the agony of selling the family home on the death of a loved partner in order to pay an inheritance tax bill?

[Baroness Penn (Con)]

My Lords, of course the Government recognise the strong family ties that my noble friend refers to. However, that is a different matter from the formal legal obligations that marriage and civil partnership relationships entail. I also remind noble Lords of the context that 95% of estates pay no inheritance tax at all.