According to recent press commentary, Ken Dodd married his long-time partner, Anne Jones, just two days before he died. With an estate estimated to be £7m, the executors were facing an Inheritance Tax bill of over £2m, but tying the knot means that assets transferred to Anne can now be made tax-free.
Many years ago, Ken brushed off tax evasion accusations by HMRC. He was accused of numerous counts of tax fraud, and although he settled tax arrears in full, including penalties, he was cleared by the jury in the court case of fraud.
Ken and Anne’s recent actions highlight the tax-free status of transactions between husband and wife, and civil partners. If the receiving spouse is domiciled in the UK, then any assets transferred on death or during life can be made with no liability to capital gains tax or inheritance tax.
As a bonus, Anne will see an uplift in the base cost of any assets subject to capital gains tax, that she receives from Ken’s estate.
For readers with significant estates, who find themselves in a similar position, being married, for tax purposes, is a compelling argument if you want to maximise the value of your after-tax estate for your family.
We offer advice on estate planning and would recommend that you consider your options sooner than two days from your expected demise. Being married is just one of many strategies that you can make to ensure your hard-won assets are protected from taxation on your death.