• Catherine Utley

Siblings issue to be raised in forthcoming inheritance tax report

7 May 2019

The Office of Tax Simplification, which is carrying out a review into the way inheritance tax operates in the UK, has told Family Ties Matter that the cohabiting siblings issue will feature in its forthcoming report.

In a letter to Catherine Utley of Family Ties Matter, the tax director, Bill Dodwell, who is in charge of the review, said: "We shall mention...whether to allow a spouse exemption for siblings, or to extend the definition of descendant for the extra residence exemption in our report, which is due before the summer". Mr Dodwell was responding to a letter from Catherine Utley in which she expressed the campaign's fervent hope that the unfair treatment of siblings and other close family members who live together long term would be addressed in the report.

Mr Dodwell's letter comes after exchanges in the House of Lords on 21 March, during which the then Treasury minister in the Lords, Michael Bates, said the government would "take seriously" the findings of the Office of Tax Simplification's report, though he said it had no plans, at present, to change the inheritance tax rules for cohabiting siblings. During the exchanges in the Lords, Lord Bates also referred to the meeting he had held in December with Lord Lexden and Catherine Utley, at which he said a "persuasive case" to look into the issue had been made.

Catherine Utley of Family Ties Matter said: "Bill Dodwell's letter is the first glimmer of hope we have seen that this matter is, at last being taken seriously. We look forward to the publication of the OTS report and hope that it will recommend the government to take the steps that are so urgently needed to end the discrimination against long term cohabiting family members. The present policy of singling them out for fiscal punishment – often resulting in the loss of their home on bereavement – must be changed".