PROCEDURE

The case originated in an application (no. 13378/05) against the United Kingdom of Great Britain and Northern Ireland lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two British nationals, Ms J.M. and Ms S.D. Burden (“the applicants”), on 29 March 2005.

The applicants were represented by Ms E. Gedye of Wood, Awdry and Ford, solicitors practising in Chippenham. The United Kingdom Government (“the Government”) were represented by their Agent, Mr J. Grainger, Foreign and Commonwealth Office.

The applicants complained under Article 14 taken in conjunction with Article 1 of Protocol No. 1 that, when the first of them died, the survivor would be required to pay inheritance tax on the dead sister's share of the family home, whereas the survivor of a married couple or a homosexual relationship registered under the Civil Partnership Act 2004, would be exempt from paying inheritance tax in these circumstances.

The application was allocated to the Fourth Section of the Court (Rule 52 § 1 of the Rules of Court). Within that Section, the Chamber that would consider the case (Article 27 § 1 of the Convention) was constituted as provided in Rule 26 § 1.

On 30 June 2005 the President decided to give the case priority treatment under Rule 41 of the Rules of Court and that the admissibility and merits should be examined jointly, in accordance with Article 29 § 3 of the Convention and Rule 54A.

The applicants and the Government each filed written observations (Rule 59 § 1). On 11 April 2006 the Chamber decided, after consulting the parties, to hold a hearing on the admissibility and merits (Rule 59 § 3 in fine).

The hearing on admissibility and merits took place in public in the Human Rights Building, Strasbourg, on 12 September 2006. There appeared before the Court: (a) for the Government Ms K. McCLEERY, Agent, Mr J. CROW Counsel, Mr J. COUCHMAN, Adviser, Ms S. TARIQUE, Adviser, Mr R. LINHAM, Adviser, (b) for the applicant Mr S. GRODZINSKI, Counsel, Ms E. STRADLING Solicitor, The Court heard addresses by Mr Crow and Mr Grodzinski, as well as their answers to questions put by Judge Bratza.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

The facts of the case, as submitted by the parties, may be summarised as follows.

The applicants are unmarried sisters, born on 26 May 1918 and 2 December 1925 respectively. They have lived together all their lives; for the last 30 years in a house built on land inherited from their parents in Wiltshire.

The house is owned by the applicants in their joint names. According to an expert valuation dated 12 January 2006, the property was worth GBP 425,000, or GBP 550,000 if sold together with the adjoining land. The sisters also jointly own two other properties, worth GBP 325,000 in total. In addition, each sister owns in her sole name shares and other investments worth approximately GBP 150,000. Each has made a will leaving all her property to the other.

The applicants submitted that the value of their jointly-owned property had increased to the point that each sister's one-half share was worth more than the current exemption threshold for inheritance tax (see paragraph 13 below), and that the survivor might have to sell the house in order to pay the tax.