Belfast Telegraph

Home News UK

Sir Ken Dodd may have last laugh over tax affairs

Experts said that in general a person’s marital status can make a big difference to inheritance tax.

Sir Ken Dodd may have had the last laugh when it came to his tax affairs.

The comedy legend died just two days after marrying Anne Jones, his partner of 40 years.

Experts said that, in general, a person’s marital status can make an enormous difference when it comes to inheritance tax bills.

Assets can be passed between married couples free of inheritance tax.

bpanews_e6cd2e63-803d-4b64-8b42-e7b5678354b9_embedded21596194
Ken Dodd Trial

Sarah Coles, a personal finance analyst at Hargreaves Lansdown, said: “In addition to the enormous emotional resonance a wedding carries, there are also tremendous differences between the ways that a partner and a spouse are treated when it comes to inheritance tax.

“Assets can be passed between spouses free of inheritance tax, which can make an enormous difference to the tax due.”

She said the nil rate band for inheritance tax is currently £325,000, while home owners have a residence nil rate band at £100,000.

Ms Coles continued: “For unmarried couples, when one dies and leaves everything to the other, everything aside from these allowances may be taxed at 40%.

“For married couples leaving everything to the surviving spouse, there will be no inheritance tax to pay on the first death no matter how big the estate is.

“What’s more, when couples leave assets to one another, their nil rate bands also pass over to the other, so that the surviving spouse can leave £650,000 of cash and (assuming they are passing it to children or grandchildren) £200,000 worth of property free of tax.

“The same does not apply to unmarried couples.”

bpanews_e6cd2e63-803d-4b64-8b42-e7b5678354b9_embedded229866036
National Television Awards 2017 – Press Room – London

Ms Coles said there are also benefits to being married where money is held in Isas.

She said: “They may be subject to inheritance tax, but if you are married, you get an additional Isa allowance – equal to whatever your spouse held in Isas at the time of their death.

“It’s known as an additional permitted subscription allowance – or APS.

“It means that after probate, you can wrap assets into this APS again, and shelter them from tax. If you aren’t married, there’s no APS.”

Sir Ken, who was knighted in honour of his decades-long showbiz career and charity work, was acquitted following a five-week trial, accused of tax fraud, in 1989 and would later joke about the case.

Tasnim Khalid, head of wills, trusts and estate planning at JMW Solicitors said: “Leaving an estate to a legally married spouse rather than a partner or cohabitee has huge tax advantages…

“We had a client who was once exposed to several millions of pounds in inheritance tax but the simple act of marriage eradicated the tax liability altogether.”

Daily News Headlines Newsletter

Today's news headlines, directly to your inbox.

Popular

From Belfast Telegraph