How Ken Dodd beat inheritance tax
By Maplebrook Wills
15th Mar '19
Legacy Planning, Wills
Comedian Ken Dodd had the last laugh by depriving the government of £11m in inheritance tax.
The much-loved comedian died in March 2018 at the age of 90. By getting married just two days before his death, he ensured that his wife inherited his entire £28m estate – with no inheritance tax to pay.
Ken Dodd already had a will, made some time ago, but it would have been revoked by the marriage.
Because he was married with no valid will, the laws of intestacy – would have applied. These rules dictate how an estate is passed on, in a fixed order, to a spouse and blood relatives.
Ken Dodd had no children. And because his parents, and presumably his brother and sister, predeceased him, the entire estate went to his new wife.
If he hadn’t got married, his existing will would have come into force. And that would have meant that inheritance tax was due – at a rate of 40% – above a threshold amount. The threshold is called the nil rate band and for Ken it would have been £325,000.
But if his will had included gifts to charities, those donations wouldn’t have counted as part of his taxable estate. In fact, if you give more than 10% of your estate to charity, inheritance tax on the rest of your estate is charged at 36% instead of 40%.
It’s likely that Ken Dodd would have preferred his money to go to charities of his choice rather than the government. Back in 1989, he was taken to court – and ultimately acquitted – on charges of tax evasion.
He often made light of his dealings with the tax authorities in his stage show. He once joked: “I told the Inland Revenue I didn’t owe them a penny because I lived near the seaside.”
Happily, a large part of Ken Dodd’s estate has been pledged to good causes. His wife Anne, who’d been his partner for 40 years before they got married, knew about his wishes in his old will.
She told the Liverpool Echo she would honour his desire to support local causes. They include St John The Evangelist church, Shakespeare North, Clatterbridge Hospital, and Liverpool Heart and Chest Hospital, where he was treated during his final illness.
Anne will also continue to be involved with the Ken Dodd Charitable Foundation, for which she is a trustee.