Information Note on the Court’s case-law 92
December 2006
Burden v. the United Kingdom - 13378/05
Judgment 12.12.2006 [Section IV]
Article 14
Discrimination
Alleged discrimination against unmarried cohabiting family members in light of their future liability for inheritance tax, in comparison with survivors of a marriage or a civil partnership: no violation
Article 34
Victim
Applicants could claim to be directly affected by an inheritance law, given their advanced age and the very high probability that one of them would be liable to pay inheritance tax upon the death of the other: victim status accepted
Article 35
Article 35-1
Exhaustion of domestic remedies
Effective domestic remedy
Declaration of incompatibility under section 4 of the 1998 Human Rights Act possibly to become an “effective” remedy in light of future evidence of a long-standing and established practice of ministers giving effect to the courts' declarations of incompatibility
[This case was referred to the Grand Chamber on 23 May 2007]
Facts: The applicants, both in their eighties, are unmarried sisters and have been living together all their lives, for the last 30 years in a house built on land they inherited from their parents. Each sister has made a will leaving all her property to the other sister. They are concerned that, when one of them dies, the other will be forced to sell the house to pay inheritance tax. Under the 1984 Inheritance Tax Act, inheritance tax is charged at 40% on the value of a person's property. That rate applies to any amount in excess of GBP 285,000 (about EUR 421,000) for transfers during the tax year 2006-2007 and GBP 300,000 (about EUR 443,000) for 2007-2008. Property passing from the deceased to his or her spouse or “civil partner” (a category introduced under the 2004 Civil Partnership Act for same-sex couples, which does not cover family members living together) is currently exempt from charge.
Law
Admissibility: In the light of the applicants' advanced age and the very high probability that one of them would be liable to pay inheritance tax upon the death of the other, they could claim to be directly affected by the inheritance law in question. The Court did not consider that the applicants could have been expected to have brought a claim for a declaration of incompatibility under section 4 of the 1998 Human Rights Act before bringing their application to the Court. That domestic remedy was dependent on the discretion of the executive and the Court had previously found it to be ineffective on that ground. It was possible however that, at some future date, evidence of a long-standing and established practice of ministers giving effect to the courts' declarations of incompatibility might be sufficient to persuade the Court of the effectiveness of the procedure. Given that the applicants had been directly affected by a provision of domestic law and since there was no domestic remedy which they could be required to exhaust, the six-month time-limit prescribed by Article 35 § 1 did not apply.
Applicability of Article 14 – The Court found it highly probable that the surviving sister would be required to pay tax on property the applicants owned jointly. Since the duty to pay tax on existing property fell within the scope of Article 1 of Protocol No. 1, Article 14 was applicable.
Compliance: The applicants had claimed to be in a similar or analogous position to co-habiting married and civil partnership couples for the purposes of inheritance tax. The Government had argued that there was no true analogy because the applicants were connected by birth rather than by a decision to enter into a formal relationship recognised by law. The Court held that, even assuming that the applicants could be compared to co-habiting married and civil partnership couples for the purposes of inheritance, the difference in treatment was not inconsistent with Article 14. The difference of treatment, for the purposes of the grant of social security benefits, between an unmarried applicant who had a long-term relationship with the deceased, and a widow in the same situation, was justified, marriage remaining an institution that was widely accepted as conferring a particular status on those who entered it. The Court accepted the Government's submission that the inheritance tax exemption for married and civil partnership couples pursued a legitimate aim, namely to promote stable, committed heterosexual and homosexual relationships by providing the survivor with a measure of financial security after the death of the spouse or partner. The Convention explicitly protected the right to marry in Article 12. Moreover, the Court had held on many occasions that sexual orientation was a concept covered by Article 14 and that differences based on sexual orientation required particularly serious reasons by way of justification. The State could not be criticised for pursuing, through its taxation system, policies designed to promote marriage; nor could it be criticised for making available the fiscal advantages attendant on marriage to committed homosexual couples.
In assessing whether the means used were proportionate to the aim pursued, and in particular whether it was objectively and reasonably justifiable to deny co-habiting siblings the inheritance tax exemption which was allowed to survivors of marriages and civil partnerships, the Court was mindful both of the legitimacy of the social policy aims underlying the exemption, and the wide margin of appreciation that applied in the field. Any system of taxation, to be workable, had to use broad categorisations to distinguish between different groups of tax payers. The implementation of any such scheme had, inevitably, to create marginal situations and individual cases of apparent hardship or injustice, and it was primarily for the State to decide how best to strike the balance between raising revenue and pursuing social objectives. The central question under the Convention was not whether different criteria could have been chosen for the grant of an inheritance tax exemption, but whether the scheme actually chosen by the legislature, to treat differently for tax purposes those who were married or who were parties to a civil partnership from other persons living together, even in a long-term settled relationship, exceeded any acceptable margin of appreciation. In the circumstances of the case, the United Kingdom could not be said to have exceeded the wide margin of appreciation afforded to it. Hence the difference of treatment for the purposes of the grant of inheritance tax exemptions was reasonably and objectively justified for the purposes of Article 14.
Conclusion: no violation (four votes to three).
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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