The Last Laugh?
Two days before his death the comedian married long-term partner Anne Jones, with whom he had shared his Liverpool home for the past 40 years.
While the couple were reportedly delighted to have finally tied the knot, the action also avoided a potential inheritance tax bill of up to £2.6m.
With Dodd worth an estimated £7.2m, without the marriage the estate could have been liable for a 40% rate of IHT, whereas assets can be passed between married couples free of inheritance tax on death.
The nil-rate band for inheritance tax is currently £325,000, while homeowners have a residence nil-rate band at £100,000 if the home is left to a direct descendant.
The case highlights the current gap between the ways that a “common-law partner” and legal joined a spouse or civil partner are treated when it comes to inheritance tax. The surviving spouse may inherit the entire estate tax-free (if they are UK domiciled), and they can also inherit any unused portion of the nil rate band and the residence nil rate band. Thus the survivor, on his or her death, will have a nil rate band of £650,000 plus a residence nil rate band of £200,000, which will increase to £250,000 on 6 April 2018.
Dodd is no stranger to the Revenue, having faced down a high-profile tax evasion case in 1989 presided over by Justice Brian Leveson, now perhaps better known for chairing the public inquiry into the ethics of the British press.
The comic was charged with 27 counts of tax evasion over 15 years totalling around £800,000, with the Inland Revenue’s chief investigator accusing Dodd of having undisclosed overseas assets, including bank accounts in Jersey and the Isle of Man, where he flew regularly to deposit undeclared cash.
Dodd was represented in court by famous QC George Carman, who during the case delivered the memorable line: “Some accountants are comedians, but comedians are never accountants”.