Elderly sisters lose battle to change inheritance tax rules

Two elderly sisters have lost their battle in the European Court of Human Rights to change Britain's inheritance tax rules.

Joyce and Sybil Burden have lived together all their lives. Their home and the small farm around it in Wiltshire are worth an estimated £875,000. They say that when one of them dies, the other will have to sell up and move out to pay the crippling costs of inheritance tax which is levied at 40% of the value of the estate apart from the first £312,000 at current rates.

They appealed to the European Court arguing that they should be given the same rights for tax purposes as gay and lesbian couples who enter into civil partnerships. This would mean that when the first sister died, the surviving sister would be exempt from inheritance tax and so would be able to keep the home. However, the European Court has ruled against them.

Many people will no doubt sympathise with the sisters and their plight.

According to a survey carried out for the BBC, 60% of people would like to see inheritance tax scrapped even if it meant paying more income tax.

That seems unlikely, however, which means that thousands of people need to plan ahead if they want to reduce the inheritance tax burden as much as possible. Family members and cohabiting couples are particularly at risk of falling foul of the inheritance tax laws. The rules changed last year to help married couples but they too could still benefit from some forward planning.