Tax advice of the week: Get married
Jun 15, 2012
The government has yet to make an explicit tax break for married couples, but there are tax advantages to marriage, says John Greenwood in The Daily Telegraph. Inheritance tax (IHT) is the biggest. Married couples or civil partners can pass on their nil-rate band of £325,000 when they die. So £650,000 can pass to children tax-free on the death of the second spouse.
Unmarried partners can only pass on up to £325,000; more will attract IHT of 40%. If an unmarried partner hasn’t made a will, the survivor won’t automatically inherit. Partners who’ve bought property together can own it as ‘joint tenants’; the share in the property will then pass automatically to fellow joint tenants, but will still be liable for IHT.
Married couples can transfer ownership of assets to each other to minimise capital gains tax bills and widows, widowers and surviving civil partners can inherit basic and state second pensions if the accrual rate of the deceased partner is higher than their own. Cohabitees aren’t entitled to the bereavement allowance, paid for 52 weeks after death, at up to £105.95 a week for those between 55 and state pension age.