Unmarried sisters lose inheritance tax fight

Unmarried sisters lose inheritance tax fight

Two elderly sisters failed yesterday in their attempt to challenge Britain's inheritance tax through the European court of human rights. They had argued that they were discriminated against because they did not qualify for the same tax protection as a married couple or civil partners.

Joyce Burden, 90, and Sybil Burden, 82, are unmarried sisters who have lived together all their lives. Their home, near Marlborough, Wiltshire, was built on land inherited from their father and they have lived there for more than 30 years and own the house jointly. In their wills, each has left her estate to the other.

Under UK law, the surviving sister would be subject to inheritance tax of 40% of the value of her share of the estate above £312,000. The sisters claimed that this would mean the surviving sister would have to sell the house to pay the inheritance tax. Their case, argued on their behalf in the European court by David Pannick QC, was that this was discriminatory as, if they were married or in a civil partnership they would be exempt from the tax. The government contested the claim, which would have had huge tax revenue ramifications had it succeeded.

The European court first heard the case in September 2006 and ruled against the sisters by four to three. The sisters appealed and their case was heard by the grand chamber of the European court of human rights last September in front of 17 judges.

Yesterday the European court rejected their case.....continued below

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by a majority of 15 to two. The court ruled that, because the sisters' relationship was of a different nature to that of married couples and homosexual partners they had not suffered discrimination and there was no violation of the human rights convention.

"The absence of ... a legally binding agreement between the applicants renders their relationship of cohabitation, despite its long duration, fundamentally different to that of a married or civil partnership couple," said the written judgment.

The sisters expressed their disappointment at the decision yesterday. "We are still struggling to understand why two single sisters in their old age, whose only crime was to choose to stay single and look after their parents and two aunts to the end, should find themselves in such a position in the UK in the 21st century," they said in a statement.

"We are, of course, bitterly disappointed. This is a day we hoped, as British citizens, we would never see."

The sisters have now exhausted the legal processes available to them.

· This article was amended on Tuesday May 6 2008. The threshold for inheritance tax is currently £312,000, not £300,000 as we originally said in the article above. This has been corrected.

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