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Cohabiting siblings – is a change in the law in sight?

Mixed-sex couples are now to be allowed the option of a civil partnership – so why not siblings who own and share a home?

Conservative MP Sir Edward Leigh said recently: “Why should siblings who’ve lived together for years have to pay estate duty when one dies?”

It seems a fair question and one that The Civil Partnership Act (Sibling Couples) Bill, which had its second reading in the House of Lords this summer, is aiming to look at.

The Bill was sponsored by Lord Lexden who said: “The central issue is this: why should all those whom the government presume are in a sexual relationship, whether heterosexual or gay, enjoy legal recognition and only those who live together in committed, secure, platonic relationships be denied it?”

Currently, siblings who may have lived together for years do not have the same legal protection as couples who are married or in a civil partnership when it comes to inheritance tax allowances and exemptions.

Problems are caused because:

  • Siblings who live together cannot pass on assets to each other free of inheritance tax on death, and effectively double up their tax-free allowance, in the way that married couples and civil partners can;
  • This can create huge difficulties when one dies, especially when increased property prices substantially increase the value of the shared home, meaning sometimes the property has to be sold to meet the bill and the surviving sibling is forced to move out.

‘Glaring injustice’

Catherine Utley has lived with her sister for more than 30 years. They jointly own a house in South London where they have brought up Catherine’s daughter together.

The sisters want to be able to enter into a civil partnership so they can enjoy the same inheritance rights as other couples who have been able to formalise their relationship legally.

Catherine says: “When my sister dies, or I die, one of us will have to sell the home to pay for the inheritance tax.”

She says that because civil partnerships are open to any two people apart from blood relatives, this is a ‘glaring injustice’.

“Excluding siblings is pure discrimination,” she says. “I could have a civil partnership with my next door neighbour but I can’t have a civil partnership with the person I have shared my home and life with.”

She is far from the first cohabiting sibling to feel unjustly treated by the current legal system.

A decade ago, sisters Joyce and Sybil Burden took their case to the European Court of Human Rights arguing that denying them the relief from inheritance tax awarded to married couples and those in a civil partnership was discriminatory.

Despite living together for more than 30 years and owning their home jointly, they lost their case.

What next?

The Civil Partnership Act (Sibling Couples) Bill, which would amend the Civil Partnership Act 2004 to include sibling couples, is currently awaiting examination at the committee stage. The requirements would be that both parties are over 30 and have lived together for a continuous period of 12 years.

Although many people support it there is also concern that allowing siblings to have a civil partnership could make some vulnerable to abuse and coercion, for example if one wants to move out.

As marriage and civil partnerships are limited to two people, there have also been questions raised about whether allowing this for two siblings would necessarily be fair on any other siblings.

Some also believe that though the currently system is biased against cohabiting sibling couples, the way to redress this is through a change to tax law rather than extending civil partnerships.

For more information about this area of the law, please contact Wards Solicitors’ specialist cohabitation team.

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