The recent sad news of the death of Elizabeth Taylor – and the reports of her abundantly large estate, which due to her predilection for large diamonds and gold jewellery is reported to amount to around £350 million – has got me thinking about the inheritance tax bill that her estate will shortly be facing. Not quite the sort of sums that I handle in the day to day administration of estates, and certainly not the sort of sums I think about when I consider my own estate.
What I think is "SIX HUNDRED AND FIFTY GRAND?! Pah. Even with all that life insurance we've indulged in while we're young and healthy to make sure we'd leave a merry widow(er), I'd be breathing easy in the financial wiggle room afforded by half of that figure, ta very much." The fact is, we live in the cheap-housing-district of the North of England, we're relatively young, didn't buy our first house until the prices had started climbing and we left university in the noughties. Although I can't claim to be destitute, frankly, I pity the poor probate solicitor who has to wade through the paperwork relating to my student loans if I happen to pop my clogs before they're paid off (some time in 2070, or whenever it may be). Let's just say that the inheritance tax benefits of being married are somewhat irrelevant to us right now.
However, give us a few years, a house price rise or two - or a house move - and a bit more opportunity to gnaw at that mortgage of ours, and maybe we'll be as grateful as our parents are for the fact that in October 2007, the law changed to allow the transfer of inheritance tax nil rate bands between spouses and civil partners.
I've tried to make all that as clear for everyone else as it is in my head, but I don't think I've succeeded. It doesn't look as neat and clear as I'd imagined - try the hmrc.gov.uk website if you're especially confused. But it's probably best to sum it up thus: as long as you leave everything to each other and you're married or in a civil partnership, you can pretty much take it as read that you've got at least £650,000 to play with before either of your estates would have to pay inheritance tax. (There are exceptions, but you can talk to your solicitor about those).
And even if you don't need all of that (yet), you can always pretend you might…even if you’ve never been married to Richard Burton.