• Catherine Utley

Peers on all sides challenge minister over unfair treatment of cohabiting family members

22 March 2019

Members of the House of Lords from the Conservative, Liberal Democrat and Cross-benches united on Thursday (21 March) to challenge the government over its policy of withholding fiscal and legal protections to close family members who live together long-term.

They were speaking in exchanges prompted by a question raised by the Conservative peer, Lord Lexden, who asked the government what plans it had to change its policy, particularly in the light of the way it disadvantages two siblings, for example, who live together over decades in a jointly owned home. Responding for the Treasury, the government minister, Lord Bates, said that, because the relationship between married couples and civil partners on the one hand and cohabiting siblings on the other was different, the same fiscal and legal protections did not apply and the government had no plans "at this time" to change this.

Lawyer and Crossbench peer, Baroness Deech

From the cross-benches, Baroness Deech, the distinguished lawyer and academic, asked the government to explain exactly what it was about a short marriage or partnership of two years that would give its participants tax advantages not given to siblings living together for 50 or 60 years.

The Bishop of Chester, for his part, said it was not only a matter of tax and therefore for the Treasury – but of the denial of an obvious need for justice.

The Conservative former Secretary of State for Scotland, Lord Forsyth, pointed out that the issue was not about avoiding inheritance tax but about being able to live in the family home.

For the Liberal Democrats, Lord Marks said there was a strong case for introducing a number of reforms to help closely related family members who live together and suggested the establishment of a cross-departmental working party to consider what specific measures were necessary.

Lord Bates responded that he was happy to do this but said the government's position, as he had already stated it, was clear.

To read the exchanges in full, click here

Catherine Utley of Family Ties Matter said: "The government knows it has no moral justification for singling out for fiscal punishment family members who choose to live together in adulthood. On the inheritance tax issue specifically, it therefore falls back on endlessly repeating two false arguments. First, it says that inheritance tax only adversely affects a small minority of people and, secondly, it says that the ruling in the case of the Burden sisters in 2008 [see our About page here for more on this case] demonstrates that the government is within its legal rights to discriminate against cohabiting siblings for inheritance tax purposes.

To answer these points briefly: 1) the government understands perfectly well how crucial the spousal inheritance tax exemption is to all those live together in property they own, which is why they offer it to all married couples and all civil partners. 2) The Burden judgment – deemed unsatisfactory by many lawyers at the time – is, anyway, irrelevant to the present situation. This is because the advent of same sex marriage in 2013 and the imminent introduction of civil partnerships for opposite sex couples have totally changed the legal parameters in which that case was judged.

It is time for the government to stop trying to defend the indefensible and commit to making the necessary reforms".