The outrageous decision by the special tax commissioners last week, goes well beyond its immediate impact on trusts: it threatens the very concept of equality in marriage.

As David Budworth explains, the commissioners have decreed that the popular and entirely legitimate discretionary will trusts are invalid if a nonworking spouse is the first of a couple to die.

The Alice in Wonderland reasoning is that because a nonworking spouse has not worked during the marriage, he or she never contributed to the half-share in the house gifted to the trust. The Revenue says — and the commissioners essentially agree — that consequently that share is not that spouse’s to give and cannot therefore be used to reduce the value of the working spouse’s estate when he or she dies.

This is patent nonsense. It basically tears up all the legal framework surrounding a couple owning a house together, whether jointly or as tenants in common. All that, we are now to assume, is a cosy but meaningless fiction because only the working partner in the marriage can truly own the property. They can give “their” half to the other, but on the death of the second it’s all liable for inheritance tax (IHT).

And this is retrospective, so all existing discretionary will trusts in this situation are invalid as things stand.

It is little consolation to say, as the commissioners do, that discretionary will trusts will continue to be valid if the working spouse – now to be regarded as the only effective owner – dies first. As Nigel May at the accountant MacIntyre Hudson, points out, that means you have to die in the correct order.

This absurdity cries out for a Dickens or a Somerset Maugham to come back to life and spin a pointed yarn about a couple arranging to die in the correct order, or a stay-at-home wife committing suicide on her husband’s death and pretending she died first.

Although the Phizackerley family, the subject of the commissioners’ verdict, do not plan to appeal, I hope some way can be found to test that decision in a higher court. It simply cannot be allowed to stand.

One consequence of the new position may be to downgrade the concept of the nonworking spouse – a rarer breed than they used to be, though that is beside the point.

As many studies have argued, such spouses can easily be deemed to be working, as they are often responsible for raising children, keeping the home clean, organising visits by plumbers and so on. By any yardstick this has a value that can be measured and therefore counts as a contribution to maintaining the property and therefore effectively owning a share of that property.

This concept has been well established in law, through the divorce courts. If, at the end of a marriage, a nonworking spouse can claim a proportion of the divorcing partner’s assets on account of his or her contribution to the marriage, he or she must have the right to own a share of the assets during that marriage.

Gordon Brown, whether as chancellor or prime minister, should attend to this as a matter of urgency .

Silent muggers

If you are reading this in a coffee shop near Victoria Street, down the road from the Houses of Parliament, the innocent-looking fellow at the next table may be a thief — an identity thief.

A new report from Experian, the credit-checking group, says that this district has become the UK’s highest-risk area for identity fraud, more than three times the national average.

Next comes Kensington, a couple of miles west of Victoria. But Blackpool, Southport, Scarborough and the Isle of Wight are also all favourite hunting grounds for these crooks. The wealthy and lone flat dwellers are natural targets.

But a worrying new trend is that for the first time identity thieves are now more likely to target a victim by using their current address than a previous home.

Even though “present address” fraud requires sophisticated methods such as mail interception or redirection, it accounted for nearly half of the cases reported to Experian in the second half of 2006.

Check you are doing all you can to thwart the thieves. Monitor your credit report. Shred personal information. Never give personal details over the phone.

The internet is the easiest way to lose your identity, so delete e-mails from unknown sources without opening them, or any attachments they contain. And beware of “phishing” e-mails that ask you personal details.

Avoid using obvious passwords and if you need a reminder, write a clue only you can decipher, not the password itself. Antispyware software is worth buying.

We are at the early stages of this threat, and most of us are still too naive. But if your identity is stolen, blow the whistle immediately — it could save you a fortune.

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