Inheritance Tax: Cohabiting Siblings

Lord Palmer of Childs Hill Excerpts

Wednesday 10th February 2021 Lords Chamber

[Baroness Penn (Con)]

My Lords, to add to my previous answer, for those in certain circumstances, joint ownership would also mean that a house had to exceed £650,000—more than the average house price, including in London—to be liable for inheritance tax. As I say, there are arrangements in place whereby you can have up to 10 years to pay off inheritance tax in instalments if the estate contains an unsold house.

[Lord Palmer of Childs Hill (LD) [V]]

My Lords, in support of the noble Lord, Lord Lexden, without a change in the law, it pushes siblings who can afford it to employ expensive lawyers to incorporate a discretionary trust in their wills, which on a joint estate of £800,000 will save tax of £130,000, not as the Minister has just said. Does she agree that there is an urgent need to change the law to make such imaginative tax avoidance unnecessary?

[Baroness Penn (Con)]

My Lords, I am afraid the Government do not agree that this is an urgent issue. It is an issue that we have debated a number of times in this House, and, while we have sympathy with those who may be affected, we emphasise that it is a minority of people. Having looked very carefully at this issue, we believe that the current status is the right one.