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March 2009
Capitalisation of income needs in Inheritance Act claims: Duxbury or Ogden?
This article by Sidney Ross first appears in Family Law Week March 2009.
Background and history
The purposes of this article are to review the methods of capitalising income needs which have been employed in claims under the Inheritance (Provision for Family and Dependants) Act 1975 ("the 1975 Act"), and to compare, by means of illustrative calculations, the figures given by Duxbury and Ogden calculations for capitalisation of relatively low income needs in cases where the claimant is an elderly person. In the course of his practice, of which 1975 Act claims constitute a substantial element, the author regularly encounters such cases. The conclusion to be drawn from the illustrative calculations is that the figures obtained by the two methods are similar both in amount and in sensitivity to changes in net rate of return, and that, given the approximations inherent in all methods of capitalisation, there is no principled justification for preferring Duxbury to Ogden calculations in cases of the type considered in this article.
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