For richer for poorer

If you are planning on living together for life but don’t want to get married, you need to do some financial planning.  Usually this takes the form of arranging life insurance of some sort.

The big issue is often that one partner owns the house in which a couple live.  That partner dies and leaves everything to the other partner.  Let us say the house is worth £800,000 – in London, not a lot.  The Inheritance Tax on the house alone will cost up to £190,000.  If the couple had been married there would have been no tax.  True, you get time to pay, up to 10 years, but you get charged interest -what a blow!

Sometimes, couples want to transfer assets between themselves.  This can often be beneficial from an Income Tax point of view.  However, if you are not married, transfers of some assets can give rise to Capital Gains Tax whereas this is not the case for married couples.

From a tax point of view, there are very few advantages to be gained by not marrying.  Of course, your tax position should not dictate what you want to do in your personal life.  You just need to look out for the pitfalls and get some advice.

By | 2017-05-25T11:21:07+00:00 October 27th, 2016|Tax|0 Comments

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