Britons Facing 'Unfair' Inheritance Laws

By Michael Ross
Published on 7 Jul 2008
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Britons Facing 'Unfair' Inheritance Laws

The threshold on how much of a deceased partner's estate a widow or widower is entitled to should be raised, it has been suggested.

Leading lawyers have called for reforms to inheritance legislation, the BBC reports.

Speaking to Radio 4's Money Box programme, the experts said that spouses should receive more than what they are currently legally entitled to if their partner dies without having made a will, which currently stands at the first £125,000 plus the interest on half the remainder of the estate. The lawyers noted that this total had remained unchanged since 1993, despite inflation.

UK law also currently states that, if no will is made, all of the deceased's remaining estate minus the partner's allowance passes to his or her children: a common situation, given that the National Consumer Council estimates that four in five parents do not put down in writing how their estate is to be divided after their death.

Only surviving partners are exempt from inheritance tax, which means that, when the estate passes on to the children, many are hit with the top 40 per cent tax rate on the remaining assets - and some are even forced to sell the family home as a result.

Speaking to the broadcaster, Alastair Collett at law firm Bircham Dyson Bell said: "[The laws] certainly need to be reviewed and increased because the value of housing in particular has increased in the intervening years." Geoffrey Shindler, president of the Society of Trust and Estate Practitioners, added: "I would increase the £125,000 immediately: I would say no less than £300,000."

Mr Shindler also said that he believed the spousal inheritance threshold should be linked to inflation.
 

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