Following the death of the veteran comedian, Sir Ken Dodd, there have been suggestions that his last-minute decision to marry his long term partner was a hurried attempt to ensure his estate was not left with a £2million Inheritance Tax (IHT) bill.
The 90-year-old legendary entertainer, famous for his association with Knotty Ash, the tickling stick and his Diddy-men, was also well acquainted with the tax man. In 1989 the comedian successfully fought to clear his name after being accused of 27 counts of tax evasion by the then Inland Revenue.
Following his death, it is believed that Sir Ken left behind a legacy worth around £7.2 million. As he and his long-term partner – now widow – Anne, never had children, it is expected that the entire fortune will now pass to her.
The pair married on 9 March, two days before Dodd succumbed to a chest infection.
Although some media reports have suggested that Ken asked Anne to marry him so that she could use the title of ‘Lady Anne’ after his death, others believe that Inheritance Tax issues may have been behind their decision to tie the knot.
The last minute ceremony, which is understood to have taken place at their home, ensured that Anne, who had been his partner for 40 years, would not be liable for IHT.
Inheritance Tax is paid on any estate (including property) worth £325,000 or more. It must be paid by the beneficiary of the Will, unless they are a spouse, a civil partner or a registered charity.
Had Ken and Anne not married, then upon his death, aside from the £325,000 allowance, the remainder of the estate would have been taxed at 40 per cent.
By comparison, married couples leaving everything to the surviving spouse, pay no Inheritance Tax on the first death, no matter how big the estate is.
When married couples leave assets to one another, their nil rate bands also pass over to the surviving spouse, allowing them to leave £650,000 of cash and (assuming they are passing it to children or grandchildren) £200,000 worth of property free of tax.
At Moore Thompson we are able to help sort out your Inheritance Tax affairs. We will work on your behalf to ensure that your tax liability is minimised so that more of your hard-earned money stays with you, your business and, eventually, your loved ones. To find out more, please contact us.