Why not get married for tax purposes
Save on Inheritance Tax
If your estate is above one Nil Rate Band (currently £325,000) and you leave everything to your partner in your Will*, he/she is a chargeable beneficiary and 40% IHT will be paid on everything above the Nil Rate Band. If you are married, your spouse is an exempt beneficiary so no IHT will be payable whatsoever. Getting married for tax purposes then makes perfect sense!
Save on Income Tax
Married couples can claim and use the Married Allowance where the lower earner isn’t making full use of their personal income tax allowance, currently you can transfer £1,250 p.a. to your spouse and at 20% income tax you will save £250!
Spouse Pension Provision
Most pensions have the option of providing for your spouse if you die, so if your pension provision is inadequate, you will be extremely glad you got married. If you have a partner instead of a spouse this very probably won’t happen. Worthwhile investigating I think!
Fewer Rights if you are Cohabiting
Also called common-law partners, is this you? the phrase has no meaning at law by the way. The minority of cohabiters may have a contract in place to outline their individual rights and obligations, it really is a rarity but worth thinking about!
What is more common is an agreement to say how you will share your property if you break up, called a ‘Declaration of Trust’, mightily important if you happened to put more money in than your partner at the start!
Beware though if you have a joint bank account with your partner, on your death, it all becomes your partner’s, automatically!
So if you are in a complicated family relationship and would like help organising and unravelling your affairs, please get in touch and we will see what we can do!
* If you don’t have a Will in place the law of Intestacy come into play and your partner may not inherit everything