There was no end of comment, most generous on the death of the comedian Ken Dodd. I hear he was a great comic – I’m slightly too young for Sir Ken to have been among my favourites.
I’m more impressed by Marty Caine and Linda Smith. Nonetheless, Sir Ken’s death illustrates a relationship between inheritance tax and marriage.
The obituarists did not fail to mention then Mr Dodd’s difficulties with the ladies and gentlemen of the Inland Revenue.
Oh such delicacy. To be sure, Ken came away from the court case a free man. The trial lasted twenty-three days, he was acquitted.
The obituary writers also told us two things, one that he died in the house in which he was born more than ninety years before, and that he married his partner, his common-law wife, Ann Jones two days before his death. Their relationship lasted 40 years.
Globalisation at Work
I’ve less than scant interest in matters of celebrity. The last bit of the story caught my professional eye. The marriage. The taxes.
I read in the papers that the late comedian had amassed wealth to the value of seven and a half million pounds. I’d say there was globalisation at work there. Depending on who does the conversion, that’s ten million US dollars.
Sir Ken had no children. If we assume he’d wanted to leave his estate to 76-year-old Anne, she’d have had an inheritance tax bill of £2,750,000.
We can make a reasonable guess after forty years together, one or other of them did not believe in marriage. But they saw one benefit in the institution. Taxation. Gifts between spouse in life or in death do not attract capital gains or even inheritance tax.
Wag the Dog
I always say to my unmarried clients, not to let the tail of inheritance wag the dog of marriage. Except if one of them is on his on her death bed. Principles and beliefs are quite one thing. To save a loved one £2,750,000, marriage would be an easy thing. It would be an honourable expedient.
Ordinarily, the beneficiaries of Lady Ann Jones’s estate would have as big a tax bill, but there’s plenty of time to take steps to ensure there’s no such liability. But, just here, we’ve seen the relationship between inheritance tax and marriage
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