We have recently lost a great and well-loved comedian when Ken Dodd passed away a few weeks ago. One of the last of the old “music hall” artists he continued to work until a few months before his death. His final performance was on 28th December last year, just 3 months before his death, at the Liverpool Arena.
That might have been his last performance, but not his last laugh. Two days before his death the comedian married long-term partner Anne Jones, with whom he had shared his Liverpool home for the past 40 years. While the couple were reportedly delighted to have finally tied the knot, the action also avoided a potential inheritance tax bill of up to £2.6m.
We would not suggest that the avoidance of Inheritance Tax was the main reason for the couple finally tying the knot, but this highlights the current gap between the ways that a “common-law partner” and legally joined spouse or civil partner are treated when it comes to inheritance tax. The surviving spouse may inherit the entire estate tax-free (if they are UK domiciled), and they can also inherit any unused portion of the nil rate band and the residence nil rate band. Thus the survivor, on his or her death, will have a nil rate band of £650,000 plus a residence nil rate band of £200,000, which will increase to £250,000 on 6 April 2018.
In 1989, Ken Dodd was prosecuted on 27 counts of tax evasion but was acquitted on all charges. It is reported, however, that he paid a substantial sum in back tax and penalties. During the trial, his barrister famously said: “Some accountants are comedians, but comedians are never accountants”. For some time afterwards, Ken started his act with the words “Good evening, my name is Kenneth Arthur Dodd; singer, photographic playboy and failed accountant!”
RIP with your Diddy-Men, Kenneth Arthur Dodd 8th November 1927 – 11th March 2018.