Dodd’s planning leaves diddy IHT bill

The national papers have made much of Ken Dodd ‘having the last laugh’ by marrying Anne, his partner of 40 years two days before his death so as to avoid a £2.5M  inheritance tax (IHT) bill. The marriage allowed Ken’s assets to pass free from IHT because of the inter-spouse IHT exemption that does not apply to long-term partners.

Perhaps the more pertinent news should have been how he left an obvious bit of tax planning until the very last minute! Had he mis-timed his demise by a few days then a wholly avoidable tax bill would have been triggered and all the tickle sticks in the world would not have helped Anne.

Of course Ken Dodd is no stranger to the tax world having been famously on trial for tax evasion in 1989. During the case the judge asked him: “What does a hundred thousand pounds in a suitcase feel like?”

Dodd replied, “The notes are very light, M’Lord.”

The experience also led to some great comic moments for Dodd including: “I told the Inland Revenue I didn’t owe them a penny because I lived near the seaside.”

Dodd was represented by George Carmen QC, who in court famously quipped, “Some accountants are comedians, but comedians are never accountants”.

 

Death bed planning

Ken Dodd’s ‘death bed planning’ was in some ways not planning at all but simply avoided what would be an unjust tax scenario. However this is a timely reminder of the general principle that there is IHT planning that can be done when somebody is on their death bed, although this is often the time when tax is the last thing on people’s minds. Examples of possible strategies are as follows:

  1. Simple marriage of partners – like Ken Dodd.
  2. We recently heard in the news about the two heterosexual Irish men who got married!
  3. Explore the possibility  of restructuring investment companies into trading companies (so that business property relief (BPR) can be used).
  4. Gifts can be made prior to death which can improve the main residence nil rate band.

There are a variety of other opportunities subject to specific circumstances.

 

Search

Sign up for our newsletter

Interested in receiving the latest tax planning ideas?

Sign up to Tax Bites – our weekly update offering practical but effective tax saving tips.

Contact Us

You can use this form to request us to give you a call or if you prefer just leave us a message. Please be sure to leave us a contact number or email address for you and we will get back to you as soon as we can.

Phone
0161 927 9277

Email
office@forbesdawson.co.uk

Address
Fairbank House
Ashley Road
Altrincham
Cheshire
WA14 2DP