Under English law, if in 1966 a husband transferred ownership of his
home, from himself to his wife, would there have been a tax liability
due to this transaction on his death two years later? If so would his
wife be liable for the duty or her husbands estate?

---

Clarification of Question by crusader33-ga on 17 Oct 2006 07:02 PDT

I cannot find anything to say that transfers between husband and wife
were ever liable to estate duty or gift tax. However in 1968 my
grandmother took out a loan to cover her liability for estate duty
arising from an 'inter vivos' (between living people) gift. I am
trying to find out what the reason for this loan was. The value of the
property was large enough that if it was liable the estate duty was
significant (about 40%).

Dear crusader33-ga,

Thank you very much for accepting my comment as an answer. 
I hope it did assist you. Understanding tax at any time is a
nightmare, let alone for over 35 years ago.

answerfinder-ga

Having the legislation that applied at this time helped clear up a 37
year misunderstanding. Thanks!

What were the values of the property and the estate?

(Just out of interest.)

Probo 
- am I wrong but I thought that Husband <-> Wife was always seen as a
non transaction in the UK

Sorry, but I have been unable to find any info on the situation in 1968.

Dear crusader33-ga,

It has been difficult to establish the exact tax situation in 1966-68.
You may have to look off-line at the Finance Bills for those years. I
have, I suspect, partly found the answer to your problem. In 1963
gifts were exempt from tax after 5 years. If the person died after 2
years then a reduced amount had to be paid. In 1968 the government
created retrospective legislation in the Finance Bill which extended
the period to 7 years. For years 1 - 4 full tax had to be paid, years
5-7 were reducing amounts.

It would appear your grandmother was probably required to pay
additional duty as a result of this change. There was considerable
controversy at the time about this unfair move. (All this information
has come from the Times newspaper from my library)

Why she paid tax I cannot say. This court case may assist.

Paragraph 22 which discusses the history of the Estate Duty legislation
http://www.bailii.org/cgi-bin/markup.cgi?doc=/uk/cases/UKSC/2002/SPC00350.html&query=%22estate+duty%22+AND+history&method=boolean

Hope this helps.

answerfinder-ga

Answer-finder please post your comment as the answer for payment.