New Clause 6 - Transfers of real property between joint occupiers

Part of Finance Bill – in a Public Bill Committee at 11:15 am on 24th June 2004.

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Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary To the Treasury, Economic Affairs, Shadow Chief Secretary to the Treasury 11:15 am, 24th June 2004

I beg to move, That the clause be read a Second time.

Hon. Members will be aware that Civil Partnership Bill enables those who enter into a civil partnership to qualify for the spouse exemption from inheritance tax. Two elderly ladies living together may, if they wish,

take out a civil partnership to get the IHT advantages. Two spinster sisters would not be able to do that because of the laws of consanguinity.

There are many people living in houses, particularly in the south-east, that are potentially of value way above the inheritance tax floor. As a point of principle, it falls very hard on two sisters who have lived together for a long time if, when one dies and there is no money to pay the IHT, the other is turned out of the house. Secondly, there is a slight issue that the civil partnership arrangement implies, dare I say it, sharing the same bed.