FOURTH SECTION

CASE OF BURDEN and BURDEN v. THE UNITED KINGDOM

( Application no. 13378/05 )

This version was rectified (paragraphs 10, 11 and 28) on 20 March 2007

u nder Rule 81 of the Rules of Court

JUDGMENT

STRASBOURG

12 December 2006

THIS CASE WAS REFERRED TO THE GRAND CHAMBER

WHICH DELIVERED JUDGMENT IN THE CASE ON

29 April 2008

This judgment will become final in the circumstan ces set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Burden and Burden v. the United Kingdom ,

The European Court of Human Rights (Fourth Section) , sitting as a Chamber composed of:

Mr J. Casadevall , President , Sir Nicolas Bratza , Mr G. Bonello , Mr K. Traja , Mr S. Pavlovschi , Mr L. Garlicki , Ms L. Mijović , judges , and Mr T.L . Early , Section Registrar ,

Having deliberated in private on 12 September and 21 November 2006 ,

Delivers the following judgment, which was adopted on the last - mentioned date:

PROCEDURE

1 . 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 .

2 . 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 .

3 . 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.

5 . 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.

6 . 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 ) .

7 . 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 , Agen t ,

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

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

11 . 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.

II. RELEVANT DOMESTIC LAW

A. Inheritance tax

12 . By sections 3, 3A and 4 of the Inheritance Tax Act 1984 (“the 1984 Act”), in heritance tax is charged at 40% on the value of a person ' s property, including his or her share of anything owned jointly, passing on his or her death, and on lifetime transfers made within seven years of death. The charge is subject to a nil rate threshold of GBP 275,000 for transfers between 5 April 2005 and 5 April 2006; GBP 285,000 for transfers during the tax year 2006-2007; and GBP 300,000 for 2007-2008 (section 98 of the Finance Act 2005).

13 . Interest is charged, currently at 4%, on any tax not paid within six months after the end of the month in which the death occurred, no matter what caused the delay in payment. Any inheritance tax payable by a person to whom land is transferred on death may be paid, at the tax-payer ' s election, in ten equal yearly instalments, unless the property is sold, in which case outstanding tax and interest must be paid immediately (1984 Act, section 227(1)-(4)).

14 . Section 18(1) of the 1984 Act provides that property passing from the deceased to his or her spouse is exempt from charge. With effect from 5 December 2005, this exemption was extended to a deceased ' s “civil partner” (see paragraphs 16 -1 8 below).

B. The Civil Partnership Act 2004 (“2004 Act”)

15 . The purpose of the 2004 Act was to provide same-sex couples with a formal mechanism for recognising and giving legal effect to their relationship s, and to confer on them , as far as possible, the same rights and obligations as entailed by marriage .

16 . A couple is eligible to form a civil partnership if they are ( i ) of the same sex; (ii) not already married or in a civil partnership; (iii) over the age of 16; (iv) not within the prohibited degrees of relationship.

17 . A civil partnership is, like marriage, indeterminate in nature and can end only on death, dissolution or annulment. The 2004 Act created a comprehensive range of amendments to existing legislation, covering inter alia pensions, tax, social security, inheritance and immigration. The courts have similar powers to control the ownership and use of the civil partners ' property upon dissolution of a civil partnership as upon dissolution of a marriage.

18 . When the Civil Partnership Bill was passing through Parliament, an amendment to it was passed in the House of Lords by 148 votes to 130 , which would have had the effect of extending the availability of civil partnership, and the associated inheritance tax concession, to family members within the “prohibited degrees of relationship”, if ( i ) they were over 30 years of age; (ii) they had co-habited for at least 12 years; and (iii) they were not already married or in a civil partnership with some other person. The amendment was reversed when the Bill returned to the House of Commons.

19 . During the course of the debate in the House of Lords, Lord Alli , a Labour Peer, stated:

“I have great sympathy with the noble Baroness, Lady O ' Caithlin [the Conservative Peer who proposed the amendment], when she talks about siblings who share a home or a carer who looks after a disabled relative. Indeed, she will readily acknowledge that I have put the case several times—at Second Reading and in Grand Committee—and I have pushed the Government very hard to look at this issue. There is an injustice here and it needs to be dealt with, but this is not the Bill in which to do it. This Bill is about same-sex couples whose relationships are completely different from those of siblings.”

During the same debate, Lord Goodhart , Liberal Democrat Peer, stated:

“There is a strongly arguable case for some kind of relief from inheritance tax for family members who have been carers to enable them to continue living in the house where they have carried out their caring duties. But that is a different argument and this is not the place or the time for that argument. This Bill is inappropriate for dealing with that issue.”

During the course of the debate in the Standing Committee of the House of Commons, Jacqui Smith MP, Deputy Minister for Women and E quality, stated:

“As I suggested on Second Reading, we received a clear endorsement of the purpose of the Bill—granting legal recognition to same-sex couples, ensuring that the many thousands of couples living together in long-term committed relationships will be able to ensure that those relationships are no longer invisible in the eyes of the law, with all the difficulties that that invisibility brings.

We heard a widespread agreement from Members across almost all parties that the Civil Partnership Bill is not the place to deal with the concerns of relatives, not because those concerns are not important, but because the Bill is not the appropriate legislative base on which to deal with them.”

C. The Human Rights Act 1998 (“the 1998 Act”)

20 . The 1998 Act entered into force on 2 October 2000. Section 3(1) provides:

“So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.”

Section 4 of the 1998 Act provides (so far as relevant):

“(1) Subsection (2) applies in any proceedings in which a court determines whether a provision of primary legislation is compatible with a Convention right.

(2) If the court is satisfied that the provision is incompatible with a Convention right, it may make a declaration of that incompatibility. ...

(6) A declaration under this section ... -

(a) does not affect the validity, continuing operation or enforcement of the provision in respect of which it was given; and

(b) is not binding on the parties to the proceedings in which it is made.”

Section 6 of the 1998 Act provides:

“(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

(2) Subsection (1) does not apply to an act if -

(a) as a result of one or more provisions of primary legislation, the authority could not have acted any differently; or

(b) in the case of one or more provisions of ... primary legislation which cannot be read or given effect in a way which is compatible with the Convention rights, the authority was acting so as to give effect to or enforce those provisions. ...”

Section 10 of the 1998 Act provides:

“(1) This section applies if –

(a) a provision of legislation has been declared under section 4 to be incompatible with a Convention right and, if an appeal lies –

( i ) all persons who may appeal have stated in writing that they do not intend to do so; or

(ii) the time for bringing an appeal has expired and no appeal has been brought within that time; or

(iii) an appeal brought within that time has been determined or abandoned; or

(b) it appears to a Minister of the Crown or Her Majesty in Council that, having regard to a finding of the European Court of Human Rights made after the coming into force of this section in proceedings against the United Kingdom, a provision of legislation is incompatible with an obligation of the United Kingdom arising from the Convention.

(2) If a Minister of the Crown considers that there are compelling reasons for proceeding under this section, he may by order make such amendments to the legislation as he considers necessary to remove the incompatibility.”

22 . When the Human Rights Bill passed through the House of Lords on 27 November 1997, the Lord Chancellor explained that :

“we expect that the government and Parliament will in all cases almost certainly be prompted to change the law following a declaration of incompatibility.”

One of the Ministers with responsibility for the 1998 Act explained to the House of Commons on 21 October 1998 that :

“Our proposals [for remedial orders] safeguard parliamentary procedures and sovereignty, ensure proper supervision of our laws and ensure that we can begin to get the ability both to enforce human rights law and to create a human rights culture. They also ensure that we can do it in the context of not having to worry that if something is decided by the Strasbourg court or by our courts that creates an incompatibility, we do not have a mechanism to deal with it in the quick and efficient way that may be necessary.”

The most recent report of the Joint Committee on Human Rights , published on 4 August 2006, showed that declarations of incompatibility had been made in twenty cases between December 2000 and December 2004. In seven of these cases the declaration had been overturned on appeal, or the judgment on appeal was pending. In ten cases the offending legislation had been amended or repealed (in one case by a remedial order ), and in the remaining three cases, amendments to the offending legislation were pending or under consideration .

THE LAW

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

Article 14 of the Convention provides:

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

I. ADMISSIBILITY OF THE APPLICATION

“The Court may receive applications from any person ... claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the Protocols thereto. ... ”

Article 35 § 1 states:

“The Court may only deal with the matter after all domestic remedies have been exhausted, according to the generally recognised rules of international law, and within a period of six months from the date on which the final decision was taken.”

A. The applicants ' victim status

25 . The Government submitted that the complaint was prospective and hypothetical, because no li ability to inheritance tax had yet accrued, and might never accrue. The present applicants could not, therefore, claim to be “victims” of any violation, and their complaint represented a challenge to the tax regime in abstracto , which the Court could not entertain .

The present case was on that ground distinguishable from Marckx v. Belgium , judgment of 13 June 1979, Series A no. 31, where the applicants had been complaining about certain provisions of Belgian law that applied automatically to the illegitimate child and her mother , and Inze v. Austria , judgment of 28 October 1987, Series A no. 126, where the complaint concerned rights of inheritance where the parent had already died . In contrast, the requirement to pay inheritance ta x did not apply automatically . The applicants were not so affected by the risk of a future liability to tax as to bring them into a comparable position to the applicants in Campbell and Cosans v. the United Kingdom , judgment of 25 February 1982, Series A no. 48, where the Court found that a threat of inhuman and degrading punishment could in itself breach Article 3 of the Convention, or Norris v. Ireland , judgment of 26 October 1988, Series A no. 142, where the existence of criminal sanctions for homosexual acts must necessarily have affected the applicant ' s daily conduct and private life.

27 . The Court recalls that under Article 34 of the Convention it may receive applications from individuals and others “claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the protocols thereto”. In order to claim to be a victim of a violation, a person must be directly affected by the impugned measure (see, for example, Cornwell v. the United Kingdom , no. 36578/97, decision of 11 May 1999).

28 . It is true that neither of the applicants is, at the present time, under an obligation to pay inheritance tax, since no such liability can arise until one of them dies. However, the sisters are aged 88 and 81 respectively. The property owned by each far exceeds the current nil-rate band for inheritance tax. The Court agrees with the applicants that, from the present perspective, it appears virtually certain that one of them will in the not too distant future be required to pay substantial inheritance tax on the property inherited from her sister. In this respect the present case is closer to Marckx than to, for example, Willis v. the United Kingdom , no. 36042/97, § 49, ECHR 2002-IV, where the Court found the applicant ' s complaint about discrimination concerning the future non-payment to him of a Widow ' s Pension or equivalent to be “hypothetical”, because of the lack of certainty that the applicant would satisfy the statutory conditions for entitlement by the time he reached the age at which a woman in his position would be eligible to apply.

29 . The Court concludes, therefore, in the light of the applicants ' advanced age and the very high probability that one will be liable to pay inheritance tax upon the death of the other, that the y can claim to be directly affected by the impugned law. It follows that the Court rejects the first of the Government ' s objections to the admissibility of the application.

B . Domestic remedies

30 . The Government further contended in the alternative that, if the applicants had a n arguable complaint under the Convention , they could and should have brought a claim for a declaration of incompatibility under section 4 of the 1998 Act (see paragraph 21 above).

31 . The applicants were both currently alive and neither had yet incurred any liability to inheritance tax. Since no pecuniary loss had been suffered, the Court could not make a pecun iary award in their favour, and would, at most, make a declaration that there had been a violation of the applicants ' Convention rights. If a declaration by this Court would constitute just satisfaction for any breach of the applicants ' rights, a declaration of incompatibility by the High Court should similarly be regarded as an effective remedy.

32 . The Government argued that, consistently with the Court ' s approach and with the generally accepted principles of international law, they did not have to demonstrate either ( i ) that an application for a declaration of incompatibility under section 4 of the 1998 Act would necessarily have succeeded, or (ii) that provisions on inheritance tax in the 1984 Act would necessarily have been amended in any identified manner within any specific time period, even if a declaration of incompatibility were made. It was sufficient, for Article 35 § 1 to be engaged, that there was an available domestic remedy with a realistic prospect of success which the applicants had failed to pursue.

36 . The Government argue that the remedy under the Human Rights Act allowing an applicant to seek a declaration from a domestic court that legislation is incompatible with the Convention is sufficiently certain and effective for the purposes of Article 35 § 1. Such a declaration creates a discretionary power in the relevant government m inister to take steps to amend the offending provision, either by a remedial order or by introducing a B ill in Parliament .

37 . The Court found in its Hobbs decision (cited above) that this remedy was not sufficiently effective , essentially for two reasons : first, because a declaration was not binding on the parties to the proceedings in which it was made ; and, secondly, because a declaration provided the appropriate minister with a power, not a duty, to amend the offending legislation by order so as to make it compatible with the Convention. Moreover, the minister concerned could exercise that power only if he considered that there were “compelling reasons” for doing so.

38 . The Court considers that the instant case is distinguishable from Hobbs , where the applicant had already suffered financial loss as a result of the discrimination about which he complained but could not have obtained monetary compensation through the grant of a declaration of incompatibility. It is closer to B. and L. , where there had been no financial loss, although those applicants had already been prevented by the impugned legislation from marrying each other. In the present case, as in B. and L. , it is arguable that, had a declaration of incompatibility been sought and made, the applicants might have be en able to benefit from a future change in the law.

39 . However, it remains the case that there is no legal obligation on the minister to amend a legislative provision which has been found by a court to be incompatible with the Convention. T he Court notes that, a ccording to the information provided by the Government, by August 200 6 such amendments ha d occurred in ten out of the thirteen cases where a declaration ha d been finally issued by the courts , and in the remaining three , reforms were pending or under consideration (see paragraph 23 above) . It is possible that at some future date evidence of a long-standing and established practice of ministers giving effect to the courts ' declarations of incompatibility might be sufficient to persuade the Court of the effectiveness of the procedure. At the present time, however, there is insufficient material on which to base such a finding .

It therefore rejects the Government ' s second objection to admissibility .

C. Delay

41 . In the alternative, the Government submitted that the application was inadmissible under the six - months rule. The discrimination of which the applicants complained arose when an exemption for spouses was first introduced by the Finance Act 1975, and it first impacted on the applicants when they began co-habiting.

D. The Court ' s conclusion on admissibility

II. ALLEGED VIOLATION OF ARTICLE 14 OF THE CONVENTION IN CONJUNCTION WITH ARTICLE 1 OF PROTOCOL NO. 1

A. The parties ' submissions

1. The Government

45 . The Government emphasised that there was no right under Article 1 of Protocol No. 1 to acquire possessions; in the Court ' s case-law on domestic inheritance laws, it had consistently held that, before the relevant death occurred, the presumptive heir had no property rights and that his or her hope of inheriting in the event of death could not therefore amount to a “possession” (see Marckx , § 50; and also Inze v. Austria , judgment of 28 October 1987, Series A no. 126, § 38; Mazurek v. France, no. 34406/96, §§ 42-43, ECHR 2000-II). Since each applicant was still alive and her complaint , as surviving sister, concerned the potential future impact of domestic law on their power to inherit , Article 1 of Protocol No. 1 did not apply, and nor therefore did Article 14. T he complaint made by each sister as the prospective first-to-die was also outside the ambit of Article 1 of Protocol No. 1, because there was no restriction under domestic law on the applicants ' ability to dispose of their property, only a potential liability to tax arising after death, when the deceased would no longer be in a position to enjoy her former possessions.

46 . In the alternative, if the Court were to find that the complaint fell within the ambit of Article 1 of Protocol No. 1, the Government denied that domestic law gave rise to any discrimination contrary to Article 14.

First, the applicants could not claim to be in an analogous situation to a couple created by marriage or civil partnership (“a couple”) . The very essence of their relationship was different, because a couple chose to become connected, whereas for sisters it was an accident of birth. In choosing to become a couple by entering into a formal relationship recognised by law, the partners also made a financial commitment to each other, and agreed to give the courts powers to divide their property and to order one partner to provide for the other on separation. The special legal status of parties to a marriage had been recognised by the Commission in Lindsay v. the United Kingdom , no. 11098/84, Commission decision of 11 November 1986, Decisions and Reports 49, p. 181 and by the Court in Shackell v. the United Kingdom (dec.), no. 45851/99, 27 April 2000. No such financial commitment arose by virtue of the relationship between siblings.

47 . The Government accepted that, if the applicants could be described as in an analogous position to a couple, the re was a difference in treatment as regards exemption from inheritance tax. However, this difference in treatment did not exceed the wide margin of appreciation enjoyed by the State, both in the field of taxation and when it came to financial measures designed to promote marriage (see Lindsay and Shackell ).

The policy underlying the inheritance tax concession given to married couples was to provide the survivor with a measure of financial security, and thus promote marriage. The purpose of the 2004 Act was to provide same-sex couples with a formal mechanism for recognising and giving legal effect to their relationships, and the inheritance tax concession for civil partners served the same legitimate aim as it did in relation to married couples. Given the development of society ' s attitudes, the same arguments justified the promotion of stable, committed same-sex relationships. That objective would not be served by extending similar benefits to unmarried members of an existing family, such as siblings, whose relationship was already established by their consanguinity, and recognised by law. The difference in treatment thus pursued a legitimate aim.

48 . The difference in treatment was, mo reover, proportionate, given that the applicants, as siblings, had not undertaken any of the burdens and obligations created by a legally recognised marriage or civil partnership. If the Government were to consider extending the inheritance tax concession to siblings, there would be no obvious reason not to extend it also to other co-habiting family members. Such a change would have considerable financial implications, given that the annual income from inheritance tax was approximately GBP 2.8 billion.

2. The applicants

49 . The applicants argued that if, as they had previously argued, they could claim to be victims of discrimination, the fact that neither had yet died could not provide a separate and substantive defence. Unlike the applicants in Marckx , the present applicants were not complaining about a provision of the English law of inheritance and , the principle that the Convention does not guarantee the right to acquire possessions on intestacy or through voluntary disposition was irrelevant. In circumstances where it was effectively inevitable that there would be significant tax to pay by the surviving sister, the facts fell within the scope of Article 1 of Protocol No. 1, and Article 14 was thus also applicable.

50 . The applicants could properly be regarded as being in a similar situation to a married or same-sex Civil Partnership Act couple. While it was true, as the Government had asserted, that many siblings were connected by nothing more than their common parentage, this was far from the case with the present applicants, who had chosen to live together in a loving, committed and stable relationship for several decades, sharing their only home , to the exclusion of o ther partners. Their actions in so doing were just as much an expression of their respective self-determination and personal development as would have been the case had they been joined by marriage or a civil partnership. The powers of the domestic courts to make property orders upon the breakdown of a marriage or civil partnership did not entail that the applicants were not in an analogous situation to such couples as regards inheritance tax. Moreover, the very reason that the applicants were not subject by law to the same corpus of legal rights and obligations as other couples was that they were prevented, on grounds of consanguinity, from entering into a civil partnership. The one significant difference between the applicants and a married couple was that the applicants, being sisters, would not lawfully be entitled to have a sexual relationship. This difference was not, however, relied upon by the Government, nor could it be, given that there was no requirement in the 2004 Act for those wishing to enter into a civil partnership to be in a sexual relationship with each other.

B. The Court ' s assessment

53 . The applicants do not complain, as in Marckx , that they will be prevented from acquiring property ; they complain instead that the survivor will be required to pay tax on property they jointly own; an outcome which the Court has held to be highly probable (see paragraph 30 above). Since the duty to pay tax on existing property falls within the scope of Article 1 of Protocol No. 1, Article 14 is applicable.

54 . It is for the national authorities to make the initial assessment, in the field of taxation, of the aims to be followed and the means to be used ( Lindsay , cited above) . The State enjoys a wide margin of appreciation in this field, as is usual when it comes to general measures of economic or social strategy (see, for example, James and Others v. the United Kingdom , judgment of 21 February 1986, Series A no. 98, § 46; National and Provincial Building Society and Others v. the United Kingdom , judgment of 23 October 1997, Reports 1997-VII, § 80). A government may often have to strike a balance between the need to raise revenue and the need to reflect other social objectives in its taxation policies. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds . The Court will generally respect the legislature ' s policy choice in this field unless it is “manifestly without reasonable foundation” (ibid.; and see also Lindsay , cited above) and subject to the proviso that, in creating and implementing a scheme of taxation, the State must not discriminate between tax-payers in a manner which is inconsistent with Article 14 of the Convention (see, mutatis mutandis , Stec and Others v. the United Kingdom (dec.) , [GC], nos. 65731/01 and 65900/01, §§ 54-55, ECHR 2005- ... ).

55 . Article 14 safeguards individuals placed in similar positions from discrimination in the enjoyment of the rights and freedoms set out in the Convention and Protocols (see Marckx , § 32 and Darby v. Sweden , judgment of 23 October 1990, Series A no. 187, § 31). A difference of treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised. The Contracting State enjoys a margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment ( Stec and Others v. the United Kingdom [GC], nos. 65731/01 and 65900/01, § 51, ECHR 2006- ... ).

56 . The applicants c laim to be in a similar or analogous position to co-habiting married and civil partnership couples for the purposes of inheritance tax . The Government, however, argue that there i s no true analogy because the applicants are connected by birth rather than by a decision to enter into a formal relationship recognised by law.

57 . The Court recalls that in Shackell , while observing that there might well be an increased social acceptance of stable relationships outside the traditional relationship of marriage, it found that the situations of married and unmarried heterosexual cohabiting couple s were not analogous for the purposes of survivors ' benefits, citing the Commission ' s opinion in Lindsay that “[m] arriage continues to be characterised by a corpus of rights and obligations which differentiate it markedly from the situation of a man and woman who co - habit . ” Since the coming into force of the 2004 Act in the United Kingdom , a same-sex couple now also has the choice to enter into a legal relationship designed by Parliament to correspond almost exactly to marriage (see paragraph s 16-18 above).

FOR THESE REASONS, THE COURT

1. Declares unanimously the application admissibl e ;

2 . Holds by four votes to three that there has been no violation of Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1 .

Done in English, and notified in writing on 12 December 2006 , pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

T.L. E arly Josep Casadevall Registrar President

In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the following dissenting opinion s are annexed to this judgment :

(a) The joint dissenting opinion of Mr Bonello and Mr Garlicki ;

(b) The dissenting opinion of Mr Pavlovschi.

J.C.M. T.L.E .

JOINT DISSENTING OPINION OF JUDGES BONELLO AND GARLICKI

1. We decided to dissent because we are convinced that the prospective imposition of “full” inheritance tax on the su rviving sister violates Article 14 of the Convention taken in conjunc tion with Article 1 of Protocol No. 1. In particular, we are not persuaded by the manner in which the “margin of appreciation” doctrine has been applied to this case.

We do agree that there must be a wide margin of appreciation offered to the national authorities in tax matters. We further agree that any system of taxation, to be workable, has to use broad categorisations to distinguish between different groups of taxpayers. We would also be prepared to agree that, with regard to tax matters, there may be some kind of presumption that the solutions adopted by the national legislature remain within this margin of appreciation. Such presumption would mean that it is, in principle, the applicant who must demonstrate that the application of the tax legislation in his or her case exceeded the State ' s margin of appreciation and led to unreasonable und unjustified effects.

However, this “burden of proof” is not unlimited. In our opinion, once an applicant is able to demonstrate that the way in which the tax legislation was applied created a situation of apparent hardship or injustice, the onus shifts towards the Government, who must then show that there were good reasons for their actions. Furthermore, if our Court decides to accept that such a situation of apparent hardship or injustice remains compatible with the Convention standards, it must give a full explanation as to how it applied the “margin of appreciation” concept.

2. The majority seems to agree that there has been a marginal situation or an individual case “of apparent hardship or injustice” (paragraph 60) in respect of the applicants. What seems to us, however, to be missing in the majority ' s position is a full explanation as to why and how such injustice can be justified. A mere reference to the margin of appreciation is not enough. It should also be recalled that, in the absence of such explanation, a problem of discriminatory treatment may arise, even outside the traditional arena of the Convention rights (see, mutatis mutandis , Stec and Others v. the United Kingdom (dec.) [GC], cited in paragraph 54 of the majority ' s judgment, §§ 54-55).

The national legislature is, generally speaking, free to adopt any reasonable policy of inheritance tax exemptions. As long as the United Kingdom confined the exemptions to married couples, such categorisation might have been justified under Article 12 of the Convention. However, once the UK legislature decided to extend the exemption to permanently cohabiting same-sex couples, the problem left the specific sphere of Article 12. Thus, any further categorisation in the area of inheritance tax ‑ exemptions has to satisfy general standards of reasonableness and non ‑ arbitrariness resulting from Article 14. Of course, we do not want to cast doubt upon the reasonableness of extending exemptions to those same sex couples choosing to form a civil partnership and denying such exemption to mixed-sex couples preferring not to enter into any form of official union. But once the legislature decides that a permanent union of two persons could or should enjoy tax privileges, it must be able to justify why such a possibility has been offered to some unions while continuing to be denied to others. The problem of siblings living together permanently did not escape the attention of the UK legislators and an appropriate amendment was proposed by the House of Lords. It was, however, rejected in the House of Commons on the basis of widespread agreement that the Civil Partnership Bill “is not the appropriate legislative base on which to deal with [the problem]” (see paragraph 19 of the judgment). Such an approach may have been correct from the perspective of parliamentary technique, but it could not absolve the legislature from providing an equitable solution to the problem at a later stage.

3. The situation of permanently cohabiting siblings is in many respects ‑ emotional as well as economical – not entirely different from the situation of other unions, particularly as regards old or very old people. The bonds of mutual affection form the ethical basis for such unions and the bonds of mutual dependency form the social basis for them. It is very important to protect such unions, like any other union of two persons, from financial disaster resulting from the death of one of the partners.

The national legislature may establish a very high threshold for such unions to be recognised under tax exemption laws; it may also provide for particular requirements to avoid fraud and abuse. But unless some compelling reasons can be shown, the legislature cannot simply ignore that such unions also exist.

The situation of permanently cohabiting siblings under the UK legislation has also been negatively affected by the fact that – being within the prohibited degrees of relationship – they cannot form a civil partnership. In other words, they have been deprived of the possibility of choice offered to other couples. That is why the present case cannot be determined by reference to the Shackell v. the United Kingdom decision (see paragraph 46 of the judgment) , since the latter was based on the fact that the persons affected were generally free to choose whether or not to enter into a formal union.

4. The injustice generally inherent in the UK approach appears particularly striking in the circumstances of this case. Both sisters have already attained a rather advanced age; they have been together for several decades and neither of them has children. It is obvious that the State will be

able to collect its tax in full upon the death of the surviving applicant. But the State wants to do it twice: first upon the death of the first sister and later by imposing a new inheritance tax on what still remains of the estate. As we see it, this is scarcely compatible with Article 14 taken in conjunction with Article 1 of Protocol No. 1. It may also raise problems under Article 8 if the extent of her tax obligations compels the surviving sister to leave her house or otherwise sacrifice the lifestyle to which she has been accustomed.

DISSENTING OPINION OF JUDGE PAVLOVSCHI

This case confirms, yet again, the truth of the words uttered by Benjamin Franklin many, many years ago, to the effect that “nothing in this world is certain but death and taxes”. Practice shows that this statement is still valid, even in our 21st century.

There is a well-known opinion that all judicial decisions can, in theory, be split into four categories: (a) legal and fair; (b) illegal, but fair; (c) illegal and unfair; and (d) legal, but unfair.

In my view, the decision reached by the majority in this case may be placed in the fourth category. I am firmly convinced that a judicial decision, which represents, by its very nature, the highest expression of justice, cannot be unfair. Yet I have genuine difficulty in accepting the fairness of the judgment delivered in the case of Burden and Burden v. the United Kingdom .

Unfortunately, in reaching their conclusion that

“ ... the United Kingdom cannot be said to have exceeded the margin of appreciation afforded to it and that the difference of treatment for the purposes of the grant of inheritance tax exceptions was reasonable and objectively justified ... ” (see paragraph 61) ,

the majority failed to adduce any reason or argument for doing so. This circumstance prevents me from expressing my opinion concerning the legal aspects of the above conclusion.

Therefore, I will focus only on the issue of the general unfairness of this judgment.

In particular, this unfairness leads me to disagree with the judgment and prevents me from sharing the majority ' s opinion that there has been “no violation” in the instant case.

In my opinion, the decisive element in the case before us is the nature of the property belonging to the applicants, and their personal attitude to it.

Had assets purchased by the applicants during their co-habitation been at stake, I would have had no difficulty in accepting the majority ' s approach and, moreover, I would have readily agreed that part of such shared assets, inherited by a surviving sibling, could and should be considered as taxable property. In the case before us, however, we are faced with a qualit at ively different situation. The case concerns the applicants ' family house, in which they have spent all their lives and which they built on land inherited from their late parents. This house is not simply a piece of property - this house is something with which they have a special emotional bond, this house is their home.

It strikes me as absolutely awful that, once one of the two sisters dies, the surviving sister ' s sufferings on account of her closest relative ' s death should be multiplied by the risk of losing her family home because she cannot afford to pay inheritance tax in respect of the deceased sister ' s share of it.

I find such a situation fundamentally unfair and unjust. It is impossible for me to agree with the majority that, as a matter of principle, such treatment can be considered reasonable and objectively justified. I am firmly convinced that in modern society there is no “pressing need” to cause people all this additional suffering.