Sibling Couples

Lord Marks of Henley-on-Thames Excerpts

Thursday 21st March 2019 Lords Chamber

[Lord Bates]

My noble friend makes a persuasive case. I appreciate the meeting we had in December, to which he also brought Catherine Utley. It persuaded me that this needed to be looked at again, and I therefore went to the Financial Secretary to the Treasury and asked him to do so. He looked at it again, and pointed out in his letter to my noble friend on 6 February, along with the Answer I gave to my noble friend’s Question, that if siblings order their affairs such that they jointly hold the asset, the charge would effectively become liable only on properties exceeding £650,000 in value. If they had difficulty in making that payment, inheritance tax could be made payable over 10 years. That was set against the fact that the average property price in the UK is £225,000. Those were the arguments put forward for retaining the position.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, the noble Lord, Lord Lexden, has a strong point and he has long campaigned on it with great energy and skill. He highlights much unfairness to siblings and other blood relatives who share households. It is not only inheritance tax; there are fiscal disadvantages in a number of areas, and disadvantages in landlord and tenant intestacy. Do the Government agree that while there is not a case—and we agree with this—for equating siblings and other blood relatives with civil partners, there is nevertheless a strong case for a number of reforms? Will the Government agree to establish a cross-departmental working party to look at these issues and consider what specific measures are necessary to address these disadvantages?

[Lord Bates]

I am happy to do that. The standard response of all Treasury Ministers is to say that government policy in this area of tax is constantly under review. That has a particular meaning at the moment, because the Office of Tax Simplification is undertaking a review of inheritance tax. The issue of siblings will be within the scope of that. It is due to report in the spring, and we will take its findings seriously, but our position is clear—that this reflects an impact on a very small number of estates for which, with careful tax planning, much of the liability can be mitigated.