The potential financial cost of assisted dying

The Terminally Ill Adults (End of Life) Bill has passed its initial test in parliament and its terms will now be scrutinised in detail by a committee of MPs. As might be expected, the eligibility criteria are deliberately narrow and may be refined further as some still have concerns around safeguarding. 

The proposals require all cases to be approved by the High Court to ensure compliance but the new law and a recent case highlights that there can be significant legal ramifications, and in turn potentially severe tax implications, if someone is found to have illegally assisted with someone’s death. 

It is common for married couples to leave their assets to their surviving spouse in their will. Ordinarily, no inheritance tax (IHT) should arise in these circumstances. It is also not uncommon for those with a terminal illness to retain assets until death, rather than gifting them in lifetime, as there can be capital gains tax advantages to the surviving family in doing so.

However, where a person has assisted in another’s suicide, the common law policy known as the ‘forfeiture rule’ can apply, preventing the individual from inheriting the deceased’s estate. 

In relevant cases, it is often the surviving spouse who is potentially impacted, meaning they risk losing everything they were entitled to in their spouse’s will, including the family home. Instead of benefiting from the IHT spousal exemption on asset transfers between spouses, the estate could be passed to other relatives and subjected to IHT at a rate of up to 40%.

Proposed changes to the legislation state anyone wanting to end their life must be an adult (over 18), lived in England and Wales for at least 12 months and be registered with a GP. They must also be able to prove mental capacity and their capacity to make a clear and informed decision independently (without external influence) and be expected to die within six months. There are also additional requirements surrounding the paperwork required and the need to obtain two independent doctors’ opinions spaced at least seven days apart.

There is no guidance on how these requirements will be practically implemented. However, it is easy to imagine that many families facing such a difficult personal decision may not have the potentially disastrous legal and financial implications at the forefront of their minds. If the above conditions are not met, individuals may fall outside these rules and face the same severe financial consequences currently experienced, in addition to any criminal implications that might follow.