Having the Last Laugh!
Despite leaving an estate of £27.5 million, the Estate of Sir Ken Dodd has not had to pay a penny in Inheritance Tax. Just 2 days before he passed away, Sir Ken Dodd married his long term partner which meant his estate, which passed to his surviving spouse, was eligible for the spouse exemption.
This yielded a huge tax saving of over £11 million. Sir Ken did not leave a Will and so his estate passed via the Intestacy rules. Whilst it is always better to leave a valid Will in place, the steps taken by Sir Ken shortly before his death show the benefit of sensible and pragmatic tax planning and ensured that his estate went to those whom he cared for most rather than to HMRC.
Sir Ken, who was acquitted of tax evasion in 1989, famously joked that he never owed the Inland Revenue a penny because he lived by the sea and when Income Tax was first introduced it was 2p in the £1, he thought it still was. By taking steps to mitigate his estate’s tax bill he certainly has had the last laugh!
As well as the tax saving, the fact that Sir Ken married also ensured his spouse did not have to go through the process of staking a claim to his estate via other routes, such as the Inheritance (Provision for Family & Dependants) Act 1975.